This is the 14-part St. Petersburg Times series by Charles
Stafford and Bette Orsini which won the 1980 Pulitzer Prize for
national reporting.

The series describes the period from the arrival of the Sea Org
in Clearwater, Florida late in 1975 through to the arrest and
conviction of 11 members of the Guardian's Office.

I am posting this here because of its relevance to events in
Clearwater 20 years after its first publication.

1. Scientology brings 4 years of discord

2. Individual life force is focus of Scientology

3. Dispute over tax status goes to court

4. Church moves to defend itself a against 'attackers'
5. Church entered Clearwater on path of deceit

6. 'Priority ' critics of church faced special handling

7. Church played dirty tricks on Cazares

8. Operation Bunny Bust

9. St. Petersburg Times topped 'enemies' list

10. Church infiltrated the Clearwater Sun

11. Church tried to infiltrate Pinellas police agencies

12. Scientologists' downfall bean with phony IDs

13. Book spells out rationale for church's 'spy system'

14. Court tangle gave Scientology its first 'martyrs'

1. Scientology brings 4 years of discord

It was this time four years ago -- this time of year when the old-time
religion celebrates the birth of a child -- that the new religion came to
Clearwater.

It came sneaking into town: a religion with beliefs and practices so
alien to the teachings of Jesus that are preached in Clearwater's Christian
churches, so different from the law of the prophets that is taught in the
city's synagogues.

This is the law of the God of Israel: Thou shalt not steal.

On Nov. 9, 1975 -- the Sabbath -- an agent of the new religion with the
code name "Silver" entered Internal Revenue Service (IRS) headquarters on
Constitution Avenue in Washington, and made his way to the office of
Charles Zuravin, an attorney in the disclosure division of the chief
counsel's office. "Silver" found the file he wanted and began copying
documents. When he left late that Sunday, he took with him a stack of
copies of confidential IRS documents one foot thick. That was theft.

This is the commandment of Jesus: Thou shalt love thy neighbor as
thyself.

On Dec. 5, 1975, the hierarchy of the new religion issued this
directive:

"Power Project 3: Normandy.

"Major Target: To fully investigate the Clearwater city and county area
so we can distinguish our friends from our enemies and handle as needed."

Neighborly?

This is the law of the God of Israel: Thou shalt not bear false witness
against thy neighbor.

On Jan. 26, 1976, a day when Scientology was still masquerading in
Clearwater as the United Churches of Florida, a church official named Joe
Lisa informed another church leader that he had devised a scheme to get
reporter Mark Sableman fired by the Clearwater Sun. This was his plan:
"Have a woman (elderly) go into the office and in grief and misemotion
(sic) start screaming she wants to see Sableman's boss. She goes in and
sees this man and screams and cries about Sableman sexually assaulting her
son, or grandson. The woman takes a magazine which is lurid and perverted
and throws it into the face of the man/woman and screams 'Look what he gave
my son, not to mention what the pervert did ... sob, sob, to my Johnny.'
I'm going to the police. If you can't do something about that pervert
Sableman I will see they do something to you."

Two days later citizens of Pinellas County learned that their new
neighbors in the Fort Harrison Hotel in Clearwater were practitioners of a
new religion, Scientology, founded just 29 years ago by a science fiction
writer named L. Ron Hubbard.

It was 19 months before the government of the United States discovered
that agents of the Church of Scientology had been systematically rifling
files of government agencies for more than two years.

Discovery of the true nature of Scientology began on July 8, 1977 -- to
Scientologists a day that will live in infamy -- when FBI agents pounded
down the doors of church offices in Los Angeles and Washington and carted
away 48,149 documents. Many of these were copies of government documents
that agents like "Silver" stole after infiltrating government agencies.
Others were files of private organizations, like the American Medical
Association and The St. Petersburg Times.

Still others were internal documents of the Church of Scientology, and
these would reveal myriad dark secrets.

But knowledge of what the documents contained came slowly to the
public.

On Aug. 15, 1978, a federal grand jury in Washington indicted 11
Scientologists, nine of whom held high positions in the church's Guardian
Office. That office had this mandate: "To sweep aside opposition
sufficiently to create a vacuum into which Scientology can expand." The
28-count indictment charged them with conspiring to steal government
documents, theft of government documents, and conspiring to obstruct
justice.

All were officials of the Guardian Office except Wolfe and Miss Thomas.
Wolfe was "Silver", the agent who infiltrated the IRS, while Miss Thomas
was the church's secret agent in the Justice Department.

On Aug. 29, 1978, nine of the indicted Scientologists stood before the
bench of U.S. District Judge George L. Hart Jr. in the federal courthouse
at the foot of Capitol Hill and pleaded innocent. Two were missing. Jane
Kember and Mo Budlong were in England.

For the next 14 months, a platoon of attorneys fought to prevent a
trial and to keep the seized documents from the public eye. They claimed
the FBI raids on church offices were illegal, that the search warrant was
too general. One U.S. District Court judge upheld their claim. But two
other District Court judges -- one in Washington and one in California --
rejected their claim. The Scientologists' appeals to higher courts also
failed.

Trial was scheduled for Sept. 24 in Washington before U.S. District
Judge Charles R. Richey. It did not begin. For two weeks attorneys for the
government and the Scientologists argued and bargained, and on Oct. 8 Judge
Richey ruled that an agreement had been reached.

As a result of that agreement, Mary Sue Hubbard and her eight
colleagues appeared before Judge Richey on Oct. 26. The team of prosecutors
headed by Assistant U.S. Attorney Raymond Banoun presented a written
statement of the government's case backed up by three folders of documents.
The defense attorneys stipulated that this was the evidence the government
would have presented had the case gone to trial. Judge Richey then found
the nine Scientologists guilty of one count each of the indictment.

This scenario left the defendants free to appeal. They will claim that
the convictions should be overturned because the evidence used against them
was seized illegally. But they will not claim they are innocent of plotting
to infiltrate government agencies and steal government documents. They
never have.

Having found the Scientologists guilty, Judge Richey lifted the seal
from the documents seized in the FBI raids. Six boxes were made public
before attorneys for the defendants and the church could appeal to the U.S.
Court of Appeals for the District of Columbia. The appellate court upheld
Judge Richey and on Nov. 23, the day after Thanksgiving, the court began
releasing the remaining documents.

The number had been trimmed down. Certain documents seized in the raids
were returned to the church, apparently because they had no bearing on the
government's case. Others were removed to prevent injury to innocent people
mentioned in them.

But 20 boxes -- roughly half of the documents seized in the raids --
were made public.

Examining them is like seeing the dark side of the moon, or stepping
through a looking glass.

They were taken from church offices in Los Angeles and Washington. But
there is so much in them about Scientology's plans and programs for a quiet
city in Florida.

The documents reveal that the Church of Scientology came to Clearwater
with a written plan to establish its program headquarters -- its school of
theology, so to speak -- in the old Fort Harrison Hotel and to take control
of the city. They show that United Churches of Florida was created as a
front to protect church assets from seizure by the government.

They show that church officials conceived and carried out plots to
discredit their "enemies" -- the mayor who questioned their secrecy,
reporters who investigated and wrote about Scientology, editor and owner of
the area's largest newspaper, even local police departments.

They show that covert agents of the church took jobs with local
newspapers, community agencies, and law firms in order to spy.

They underscore what a spokesman for the Church of Scientology told a
group of Clearwater High School students recently: "We step on a lot of
toes. We don't turn the other cheek."

Government prosecutors, in a memorandum to Judge Richey urging maximum
sentences, delivered this judgment:

"That these defendants were willing to frame their critics to the point
of giving false testimony under oath against them and having them arrested
and indicted speaks legion for their disdain for the rule of law. Indeed,
they arrogantly placed themselves above the law, meting out their personal
brand of punishment to those 'guilty' of opposing their selfish aims.

"The crime committed by these defendants is of a breadth and scope
previously unheard of. No building, office, desk, or file was safe from
their snooping and prying. No individual or organization was free from
their despicable conspiratorial minds. The tools of their trade were
miniature transmitters, lock picks, secret codes, forged credentials, and
any other device they found necessary to carry out their conspiratorial
schemes. It is interesting to note that the founder of their organization,
unindicted co-conspirator L. Ron Hubbard, wrote in his dictionary entitled
Modern Management Technology Defined ... that 'truth is what is true for
you.' Thus, with the founder's blessings they could wantonly commit perjury
as long as it was in the interest of Scientology. The defendants rewarded
criminal activities that ended in success and sternly rebuked those that
failed. The standards of human conduct embodied in such practices represent
no less than the absolute perversion of any known ethical value system.

"In view of this, it defies the imagination that these defendants have
the unmitigated audacity to seek to defend their actions in the name of
'religion.' That these defendants now attempt to hide behind the sacred
principles of freedom of religion, freedom of speech and the right to
privacy -- which principles they repeatedly demonstrated a willingness to
violate with impunity -- adds insult to the injuries which they have
inflicted on every element of society."

As he prepared to sentence Mary Sue Hubbard, Judge Richey told her that
"we have a precious system of government in the United States ... For
anyone to use the benefits of those laws or to seek under the guise of
those laws to destroy the very foundation of the government is totally
wrong and cannot be condoned by any responsible citizen."

The judge imposed maximum sentences on Mrs. Hubbard and two other
defendants: five years in prison and $10,000 fines -- though he said he
would reconsider Mrs. Hubbard's sentence after she has spent three months
in prison. He sentenced five other defendants to four years in prison and
$10,000 fines, and the remaining defendant to one year in prison -- six
months of it suspended -- and a $1,000 fine.

There, in capsule form, you have the story of Scientology since it came
to Clearwater four years ago. The details are intriguing, and they will
come. But first it is necessary to understand the creation of Scientology
and its creator.

2. Individual life force is focus of Scientology

When citizens of Pinellas County learned in early 1976 that a new
religion, the Church of Scientology, had purchased two Clearwater landmarks
-- the Fort Harrison Hotel and the old Bank of Clearwater building -- they
wondered.

Local newspapers, responding to this wonder, attempted to explain a 26-
year-old religion called Scientology.

That can be a hazardous undertaking.

Writing in The Scientologist: A Manual on the Dissemination of
Material, (copyright 1955), Scientology's founder L. Ron Hubbard said:
"... We do not want Scientology to be reported in the press, anywhere else
than on the religious page of newspapers. It is destructive of word of
mouth to permit the public presses to express their biased and badly
reported sensationalism. Therefore we should be very alert to sue for
slander at the slightest chance so as to discourage the public presses from
mentioning Scientology."

Scientology is Hubbard's creation.

A precocious child, the son of a Navy commander and his wife, Hubbard
spent his teen-age years in Asia where -- according to his church biography
-- "he explored many out-of-the-way places and saw many strange-seeming
peoples and customs. But it was in northern China and India, while studying
with holy men, that he became vitally engrossed in the subject of the
spiritual destiny of Mankind."

Hubbard attended George Washington University -- there is no record
that he graduated -- and went on to a career in writing science fiction.

He went into the Navy in 1941.

"L. Ron Hubbard, A Brief Biographical Sketch" -- obtained from the
Church of Scientology -- tells us this was his period of creation:

"He survived the early war in the South Pacific. He saw enough of war
at first hand to be sickened by it. In 1944, crippled and blinded he found
himself in Oak Knoll Naval Hospital. From Commander Thompson of the Medical
Corps of the U.S. Navy, a friend of his father and a personal student of
Sigmund Freud, he had received while still young an extensive education in
the field of the human mind. He developed techniques that would help him
overcome his injuries and regain his abilities.

"Altogether, he spent nearly a year at Oak Knoll, during which time he
synthesized what he had learned of Eastern philosophy, his understanding of
nuclear physics and his experiences among men. He says, 'I set out to find
from nuclear physics and a knowledge of the physical universe, things
entirely lacking in Asian philosophy.'

"He concluded that the results he was obtaining could help others
toward greater ability and happiness, and it was during this period that
some of the basic tenets of Dianetics and Scientology were first
formulated.

"By 1947 he recovered fully."

That story conflicts with Navy records and with a government document
seized by the FBI in 1977 raids on church offices -- one of many government
documents that had been copied by secret agents of the church.

A Navy spokesman recently told the Los Angeles Times that Hubbard rose
to the rank of lieutenant during World War II but his service record did
not show that he received a Purple Heart, a medal routinely awarded for
combat injuries. The spokesman also said, "a review of L. Ron Hubbard's
medical record ... does not indicate he was treated for any injuries
sustained during his military career."

Documents released by the FBI in 1977 under the Freedom of Information
Act show that Hubbard wrote the FBI many times during these years
complaining that the Communist Party was attacking him and that Russians
were trying to lure him to the Soviet Union to steal his secrets of
brainwashing. Someone at the FBI wrote "appears mental" on one of the
letters, and after that the FBI ceased acknowledging them.

Among the documents seized by the FBI from church offices was a letter
written by Hubbard in 1947, to the Veterans Administration in Los Angeles.

"After trying and failing for two years to regain my equilibrium in
civil life, I am utterly unable to approach anything like my own
competence," Hubbard wrote. "I cannot account for nor rise above long
periods of moroseness and suicidal inclinations and have newly come to
realize that I must first triumph above this before I can hope to
rehabilitate myself at all."

He requested psychiatric treatment on an outpatient basis.

Did he receive it? The documents do not say.

Nor does the church biography. Instead, it tells us: "In 1948 he wrote
Dianetics, The Original Thesis, his first formal report of his discoveries
about the mind and life. The manuscript was copied out extensively and
quickly passed from hand to hand in many countries. A grass roots interest
in Dianetics spread. Letters began to pour in asking for clarifications and
advice."

By way of response, Hubbard wrote a book: "180,000 words of
breakthrough, Dianetics: The Modern Science of Mental Health, exploded onto
the booklists of May 1950 like a roman candle of life and hope. Providing,
as it did, for a truly workable school of the mind that would predictably
improve the human condition, it leapt to the top of The New York Times
bestseller list and just stayed there.

"Almost immediately, thousands of readers began to apply the data from
the book and Dianetic groups sprang up across the country, with and without
sanction.

"Realizing already at this stage that the mind in itself, no matter how
liberated, was limiting and that there was something 'animating' the mind,
he permitted the founding in 1950, of the Hubbard Dianetic Research
Foundation to facilitate investigation into the realm of the spirit. Thus
was Scientology born."

There is a less romantic version of the creation. It begins with
Lafayette Ronald Hubbard, science fiction writer, quite prolific, grinding
out sci-fi stories for publications like Astounding Science Fiction at 2 to
3 cents per word, or about $200 to $300 per story.

It recalls that in a 1949 lecture on science fiction, Hubbard said --
a remark the church does not challenge but dismisses as a joke: "Writing
for a penny a word is ridiculous. If a man really wants to make a million
dollars, the best way would be to start his own religion."

It traces the creation to a Hubbard article in the May 1950 issue of
Astounding entitled, "Dianetics -- A New Science of the Mind."

Then came the book, and the birth of Scientology.

Scientology has its foundations in the eastern religions: Buddhism,
Hinduism.

According to the Scientologists, the Judeo-Christian religion begins
with a God and relates man and nature to Him. The Eastern traditions begin
with man as a spiritual agent and offer ways for him to attain salvation.

Scientology, a book of the Church of Scientology setting forth its
beliefs, tells us that the "Eastern religio-philosophic mode has been that
adopted by Scientology. The expressed ideal that from self-realization, and
the resulting increased spiritual awareness, comes harmonious integration
with other life forms, the physical universe and ultimately, the Supreme
Being, is the seminal concept of Scientology."

Scientology centers on the Thetan, "the individual life force, the soul
... the person himself ... simply that which is aware of being aware." The
Thetan is immortal.

Scientology believes "that Man is basically good, and seeking to
survive, but is encumbered in so doing by painful past experiences, and his
harmful acts against others."

Hubbard theorized that the mind -- which he considers a vehicle of the
spirit, used to establish orientation in the physical world -- is divided
into two parts, the "analytical" and the "reactive." The analytical mind is
described as an efficient, rational instrument, but it rarely works at full
capacity because of interference from the reactive mind, a memory bank of
painful past experiences known as "engrams."

"... The stored pain and command phrases in past upsets and injuries,
acting like hidden hypnotic commands imposed on the Spirit, can cause the
misery of countless psychosomatic illnesses," Scientology states. "All
these have variable manifestations but all stem from the same basic cause:
old and forgotten incidents containing pain and language command value ...
As in an electrical condenser, this potentially harmful significance and
energy is stored in the sub-levels of the reactive mind, and when
activated, is discharged against the analytical mind of the Thetan. This is
the real but underlying cause of the eternal recurrence of war, illness and
aberration. To reverse this pattern of human misery in all its tragic
multiplicity is the goal of auditing, the religious practice of the Church
of Scientology."

The book says, "Auditing is the Scientology pastoral counseling
procedure by which an individual is helped through confessional
unburdening, and in stages, to recover his complete self-determination and
ability. It is done during a precise period of time called a 'session,' in
which an auditor ... utilizes inter-personal communication and carefully
devised questions and drills ... which enable the person audited, called
the PRECLEAR, to discover and thereby remove his self-imposed spiritual
limitations."

The auditing process is done in stages, like climbing stairs, the book
states. "When no part of the mind remains which is not under the
individual's own control and direction, the State of CLEAR has been
achieved -- a state of supra-human awareness and ability ..."

The person who seeks relief from his engrams contracts for auditing.
The schedule of "donations" for auditing services range from $25 for a
beginning session to between $1,000 and $5,000 for more advanced auditing.
Converts might pay $10,000 to $12,000 to obtain the "State of CLEAR."

This is the source of the church's wealth, of the funds used to
purchase the Fort Harrison and the Bank of Clearwater building.

Scientology is governed by a creed written by Hubbard. The creed -- the
church's bright face -- has the ring of virtue: "We of the Church believe:
That all men of whatever race, colour or creed were created with equal
rights. That all men have inalienable rights to their own religious
practices and their performance ..."

It goes on to encompass 20 specific beliefs.

Two of these 20 state: "... all men have inalienable rights to their
own defense" and "no agency less than God has the power to suspend or set
aside these rights, overtly or covertly."

Within those two beliefs, apparently, there is justification for
Scientology's long war with the government of the United States.

3. Dispute over tax status goes to court

On Jan. 4, 1963, two large vans escorted by motorcycle policemen pulled
up before the Washington headquarters of the Founding Church of Scientology
at 19th and R streets.

U.S. marshals climbed out of the vans and entered the church property.
There they seized 100 "E-meters" and about 20,000 pages of church
literature. They were acting for the U.S. Food and Drug Administration
(FDA).

Though relations between the Church of Scientology and the government
had been strained for most of the 13 years since L. Ron Hubbard created the
new religion, that incident marked the first formal action against the
church by the government.

Others followed, most of them generated by the Internal Revenue Service
(IRS). The church has long claimed that it is the victim of harassment by
a government angered because Hubbard refused to share with it revolutionary
knowledge about freeing the mind of traumas. But the actions the government
has taken against Scientology all center on a fundamental question: Is
Scientology a religion, or a pseudo-scientific con game involving amateur
psychology?

The answer is vitally important. A valid religion, or church, pays no
taxes.

Scientology has been in and out of federal courts and in again in
battles with IRS over its tax-exempt status. It has even resorted to
illegal tactics, placing an agent in IRS headquarters where he stole
thousands of documents concerning the church.

The battle is fought at every level of government. Since coming to
Clearwater, the church has been locked in a fight with Pinellas County
officials over whether it must pay property taxes on the Fort Harrison
Hotel, the old Bank of Clearwater building, and other property it has
bought in the county.

Last Friday, the Church of Scientology paid $126,753.82 in back taxes,
a figure representing 45 percent of its total four-year tax bill in
Pinellas County.

The payment ended a long legal battle between the Scientologists and
Property Appraiser Ron Schultz's office over the church's 1976 and 1977 tax
bills. But it does not mean the church is giving up its claim to be
tax-exempt as a church. Scientology President Kenneth Whitman vowed the
church will pursue legal battles over its 1978 and 1979 tax bills, which
total $151,157.51.

Schultz said the church was certain to lose its case on the earlier tax
bills and hence decided to go ahead and pay them in an effort to "buy some
PR (public relations)."

The Pinellas County Circuit Court held that the church had to pay its
1976 tax bill, a decision affirmed by the Court of Appeal in Lakeland. The
case was pending before the Florida Supreme Court. The 1977 tax bill was
pending at the Circuit Court level.

There is much at stake in the tax battles. The Church of Scientology is
obviously wealthy. It paid around $3-million cash for the two pieces of
property in downtown Clearwater. Its funds come from the fixed donations
that church members pay for auditing, the pastoral-counseling procedure
designed to free their minds of painful memories.

The Food and Drug Administration charged the church in 1963 with making
false claims for a small device called a Hubbard Electrometer, or E-meter,
a device used in some auditing sessions.

The E-meter -- essentially a simple galvanometer -- is a small box
bearing five knobs and a magnetic needle. It operates on a rechargeable
1 1/2-volt battery. A Y-cord from the box leads to two small cans that
resemble frozen orange juice cans. The person being counseled grasps the
cans as the counselor asks questions. By watching the needle on the dial,
the church says, the counselor knows when the person is recalling pain.

FDA accused the church of falsely claiming that the meter would
"improve the health, intelligence, ability, behavior, skill and appearance"
and cure arthritis, tuberculosis, ulcers and other ailments that Hubbard
considered to be psychosomatic.

The FDA case lingered in the courts for 10 years. It was finally
settled in 1973 when U.S. District Judge Gerard A. Gesell ordered the
E-meters returned to the church.

He ruled that (1) the church could no longer advertise its services as
a scientific cure for disease, (2) must label the E-meters as ineffective
in treating illnesses, and (3) could only use the E-meter in "bona fide
religious counseling."

In his 14-page opinion, Gesell described Scientology as a
"pseudo-science that has been adopted and adapted for religious purposes
... There is a religious substance to everything when seen with the eyes of
the believer." He called Hubbard "a facile, prolific author" whose
"quackery flourished throughout the United States and in various parts of
the world."

The judge said Hubbard first advanced "the extravagant, false claims
that various physical and mental illnesses could be cured by auditing" in
a science fiction magazine in the 1940s.

As the church developed, he said, "auditing was guaranteed to be
successful. All this was and is false -- in short, a fraud. Contrary to
representations made, there is absolutely no scientific or medical basis in
fact for the claimed cures attributed to E-meter auditing."

Since Gesell had said the church was entitled to First Amendment
protection as a religion and that it could use the E-meters for religious
counseling, the church hailed the decision as a victory.

# # #

The church's fight with the Internal Revenue Service seems destined to
go on forever.

At present, 14 churches of Scientology in the United States -- all
except one -- are recognized as tax-exempt. The Church of Scientology of
California, of which the Clearwater operation is a branch, is contesting in
U.S. Tax Court an IRS ruling that it must pay taxes.

The IRS does not grant tax-exempt status, a spokesman explained.
Churches are exempt by law as long as they comply with the law. Should IRS
have reason to believe a church is not complying, then it can audit the
church's records, which can lead to a determination that it must pay taxes.

The crucial question is how a church makes its money and how it spends
it. The income must be used for the general good and not for the profit of
individuals.

How this applies to Scientology is well illustrated by an IRS
memorandum concerning the tax-exempt status of the Church of Scientology of
Florida, headquartered in Miami. The Florida church is separate from the
Clearwater operation, which is a branch of the Church of Scientology of
California.

The IRS memorandum, dated Sept. 1, 1972, was among the documents stolen
from IRS headquarters in Washington by the church's agent. It was made
public in connection with the trial in Washington of the agent and eight
other Scientologists on charges of conspiring to steal government
documents.

The National Office Technical Advice Memorandum was sent to the IRS
district director in Atlanta in reply to his request for advice on
revocation of the exempt status of the Church of Scientology of Florida.

The memorandum stated that almost all income of the Florida church came
from fees paid for counseling and from the sale of books and artifacts. The
church in turn paid 10 percent of its income "to the international
organization as a 'tithe' to promulgate and defend the religion of
Scientology." This money went into Swiss Trust Accounts.

"In order to qualify for the claimed exemption, Scientology must
establish that it is devoted exclusively to religious purposes," the
memorandum said. "The presence of a single nonexempt purpose, if
substantial in nature, will destroy the exemption, regardless of the number
or importance of truly exempt or religious purposes ... Based on this
exclusivity test, we have concluded the Church of Scientology of Florida
fails to qualify for exemption because (1) its sales of books, tapes,
artifacts, processing and training constitute a substantial commercial
purpose, and (2) a portion of the net earnings of Scientology may inure to
the benefit of L. Ron Hubbard, a private individual ...

"While the information available does not specifically disclose the
inurement of funds, the organization has not established that the tithing
of 10 percent of its gross income to the Swiss Trust Accounts has been
distributed for exempt purposes. The Trust accounts are held in the name of
L. Ron Hubbard and Mary Sue Hubbard, his wife, as the sole signatories.
Therefore, the organization has failed to establish that neither the legal
title nor the beneficial use of the funds is held for a recognized charity
or charitable purpose."

The memorandum recommended revocation of the Florida church's tax
exemption, but no action was taken.

In an apparent effort to circumvent the objection that Scientology
funds went to the benefit of Hubbard, he and representatives of five
churches of Scientology -- California, Washington, D.C., Michigan,
Minnesota and New York -- signed a document on June 25, 1973 "to
memorialize in writing" a trust arrangement they said had been in existence
since July 18, 1962. The five churches agreed to pay tithes of 10 percent
of their monthly incomes to the trust fund. Hubbard, as the sole trustee,
was responsible for managing, administering and disposing of the fund.

A month later, a new agreement recorded the resignation of Hubbard as
trustee. Responsibility for the fund was placed in the hands of a
three-member board of trustees, one of whom was Mary Sue Hubbard. The
agreement gave Mrs. Hubbard life tenure and the power to appoint the other
two trustees who would serve two-year terms.

Terms of this agreement were reported in July 1976 by St. Petersburg
Times reporter Bette Orsini. She also found that 11 of the 12 churches of
Scientology then holding tax-exempt status had collected a total of
$3.3-million in 1974 and contributed $846,310 of that to the Church of
Scientology of California. Nine of the churches had deposits totaling
$1-million in bank accounts in Luxembourg.

The trust agreement was put in written form at a time when the IRS was
going to court to force the Church of Scientology of California to open its
books for audit. Today, the California church is contesting revocation of
its tax-exempt status in the U.S. Tax Court.

The IRS said the church owes $1,150,458 in taxes on $8,684,452 in gross
receipts for 1970, '71 and '72. To this it has added a penalty of $287,614.

The church replied that the church was tax-exempt. But should it be
found that it was not, the church said, the government was still wrong in
its assessment of tax liability because it had understated church expenses.
The church claimed it had net taxable losses for the three years totaling
$8,859,165.

The church asked why IRS was putting the church and the court to the
time and expense of a trial "when the IRS has already acknowledged to
petitioners that after an extensive 1 1/2-year audit of church records,
they could find no basis for denying the church exempt status."

It accused IRS of stalling and of violating the church's First
Amendment rights.

The case was opened in December 1977. Court observers say it won't be
settled for quite some time. A decision in any court case involving the
church seldom comes swiftly.

In its 16-year war with the government, the church has employed tactics
that reveal the dark side of Scientology.

4. Church moves to defend itself against 'attackers'

The Church of Scientology has a persecution complex. It apparently was
born with it.

The church was founded by science-fiction writer L. Ron Hubbard. A
biographical sketch supplied by the church states that Hubbard devised the
basic doctrine of his religion while recovering from World War II injuries
in a naval hospital.

It recounts that Hubbard explained his theories in a 1950 book entitled
Dianetics: The Modern Science of Mental Health and then, in response to
grassroots demand for more information, founded the Hubbard Dianetic
Research Foundation.

The biography continues:

"The United States Government at this time attempted to monopolize all
his researches and force him to work on a project 'to make man more
suggestible' and when he was unwilling, tried to blackmail him by ordering
him back to active duty to perform this function. Having many friends he
was able to instantly resign from the Navy and escape this trap. The
government never forgave him for this and soon began vicious, covert
international attacks upon his work, all of which were proven false and
baseless, which were to last 27 years and finally culminated in the
government being sued for $750-million for conspiracy."

You won't find that story in any government history books. Attempts to
learn from the Navy whether any of Hubbard's story is accurate were
unsuccessful.

Queried about the church biography's description of Hubbard's career,
a Navy spokesman said:

"His service record contains no entry indicating that he was injured as
a result of action against the enemy. Injuries he may have suffered during
World War II, if any, would be filed in his medical record. Under the
Privacy Act, information contained in a person's medical record may be
released only with the written consent of that individual.

"He was a patient at the U.S. Naval Hospital, Oakland, Calif., from
Sept. 5, 1945 to Dec. 4, 1945. The reason for his hospitalization is not
releasable under the Privacy Act for the reasons I have already stated.

"Lt. Hubbard was a naval reservist on inactive duty from Feb. 17, 1946
until Oct. 30, 1950. On 30 Oct. 1950 his resignation from the Naval Reserve
was accepted. There is no evidence on record of an attempt to recall him to
active duty."

In any case, a high level of tension has existed between the church and
the government for at least the past 16 years.

This tension, this belief of Hubbard that he and his religion are
targets of a government campaign of persecution, has produced the dark side
of Scientology. It gained recent national publicity when a group of church
leaders, including the founder's wife, Mary Sue Hubbard, were accused of
conspiring to steal government documents and obstruct justice.

The manifestations of the dark side of Scientology are a series of
policies issued by Hubbard, as commodore of the church, over a number of
years.

Basic to the dark side of Scientology is this definition, written by
Hubbard in his dictionary entitled Modern Management Technology Defined:
"Truth is what is true for you."

One of the most controversial of Hubbard's dictums was the "Fair Game
Law." Under this 1965 law, a suppressive person (SPs in Scientology jargon)
"one that actively seeks to suppress or damage Scientology or a
Scientologist by suppressive acts" -- should be designated "fair game."

The punishment: "May be deprived of property or injured by any means by
any Scientologist without any discipline of the Scientologist. May be
tricked, sued or lied to or destroyed."

Mention that policy to a Scientologist today and he will tell you that
it was canceled by Hubbard in 1968. But Hubbard's cancellation said this:

"The practice of declaring people fair game will cease. Fair game may
not appear on any Ethics Order. It causes bad public relations.

"This P/L (policy letter) does not cancel any policy on the treatment
or handling of an SP (suppressive person)."

In 1966, Hubbard advised church officials that the way to respond to
attacks was to attack the attacker. He wrote:

"This is the correct procedure:

"(1) Spot who is attacking us.

"(2) Start investigating them promptly for FELONIES or worse using our
own professionals, not outside agencies.

"(3) Double curve our reply by saying we welcome an investigation of
them.

"Don't ever tamely submit to an investigation of us. Make it rough,
rough on attackers all the way."

Meanwhile, he said, "to get wholly over to cause we must select
targets, investigate and expose before they attack us."

Hubbard directed that the courts be used as an avenue of attack. In a
1955 publication, he stated: "... We do not want Scientology to be reported
in the press, anywhere else than on the religious page of newspapers. It is
destructive of word of mouth to permit the public presses to express their
biased and badly reported sensationalism. Therefore we should be very alert
to sue for slander at the slightest chance so as to discourage the public
presses from mentioning Scientology."

In a publication entitled Ability, the commodore said: "... The purpose
of the suit is to harass and discourage rather than to win. The law can be
used very easily to harass, and enough harassment on somebody who is simply
on the thin edge anyway, well knowing that he is not authorized, will
generally be sufficient to cause his professional decease. If possible, of
course, ruin him utterly."

In 1963, the church issued its "Five Press Policies," and one of them
instructed members on how to handle a reporter.

"He wants a story," it said. "The only way to handle him are to eject
him or to give him a story that he thinks is a story. There are no half-way
measures ...

"The rules of newspaper writing today are very exact. And this is
probably a far better analysis of the rules than he has, so you could
surely win.

"To be printed, a story must contain one or more of these things:

"(1) Harm (Blood, violence, damage, death, scandal).

"(2) Sex.

"(3) Money.

"(4) Big names.

"(5) The story must be written to invalidate something.

"(6) The story must contain a controversy.

"(7) A story must contain two opposing forces ..."

Hubbard devised a technique of using anonymous or covert methods to
destroy an enemy's reputation. He called the tactic "Black Propaganda."

Instruction in its use is contained in a Hubbard policy letter of 1971
reprinted in a volume entitled The Management Series.

"The most involved employment of PR (public relations) is its covert
use in destroying the repute of individuals and groups," he wrote. "More
correctly, this is technically called BLACK PROPAGANDA. Basically, it is an
intelligence technique."

Hubbard created the Guardian Office to protect the church from attack.
Mary Sue Hubbard gave the office its goal. "The primary function of the
Guardian Office," she said in a Guardian Order of Oct. 19, 1974, "is: To
sweep aside opposition sufficiently to create a vacuum into which
Scientology can expand."

Orders setting out programs for operatives in the Guardian Office were
manifestations of Hubbard's policies.

Oct. 21, 1974: "SITUATION: The IRS (Internal Revenue Service), despite
extensive legal and PR handling, is persisting in its attack upon the C of
S and LRH ...

"IDEAL SCENE: IRS with no false reports in their files on Scientology,
uninterested in Scientology taxes, other than as a routine matter, doing
their jobs and busy elsewhere with the usual red tape of a bureaucracy,
with the psychotics located and their influence eliminated ...

"PLAN: Finance, PR, and legal continue their actions while B4 enters
the arena and gets every single false report in every single IRS file. Once
the data has been revealed, the lies can be corrected, the SPs isolated and
handled, further PR and legal actions initiated and the IRS attack turned
off."

The order directed that agents, "trustworthy and well grooved,"
immediately infiltrate IRS offices in Washington, Los Angeles and London
and obtain copies of the documents.

June 27, 1975: "Info must find the who back of these IRS attacks and
document it for exposure plus all other items of interest. It could be IRS
and the government is attacking any vocal group to pave the way for some
coup by the government. Evidence as to the why of these attacks must be
gotten, powerful enough to destroy the attackers when eventually used or
revealed."

This order was from Hubbard, who said that somewhere in IRS was "an
insane individual with insane plans" who was operating a "false reports
factory." He wanted that person found.

Sept. 16, 1976: "Operation Cat." The order said, "The idea is to make
a mockery and hold up to ridicule the computer, the security services and
authority in relation to FOI (freedom of information.)" The goal: "To plant
grossly false information in governmental agencies, especially security
services files, for later public retrieval and ridiculing exposure."

Operations like these were not limited to the IRS, or even to
government. Documents released by a federal court in Washington show that
they were also employed against public officials and private citizens on
the Florida Suncoast.

On July 21, 1976, one of the strangest of many strange orders was
issued. It was entitled "Operation Bulldozer Leak."

It began: "MAJOR TARGET: To effectively spread the rumor that will lead
Government, media, and individual SPs to conclude that LRH has no control
of the C of S and no legal liability for church activity."

One is left to wonder how it ended, and where the 68-year-old spiritual
leader of Scientology now resides, and what policies he will promulgate
next.

5. Church entered Clearwater on path of deceit

The Church of Scientology came to Florida's Suncoast in late 1975
wearing a cloak of secrecy that concealed a dagger of deceit.

The mystery began Oct. 27. The Fort Harrison Hotel was purchased by
Southern Land Sales and Development Corp. for $2.3-million hard cash, and
then a few days later the old Bank of Clearwater building for $550,000.

For whom? And why?

A middle-aged man in a green jump suit appeared in mid-November to say
that he, Sorel Allen, was "director of membership and public affairs" for
United Churches of Florida. He said the buildings would be leased to United
Churches, a new organization organized by laymen interested in the
religious truths of all denominations, and he said this ecumenical group
would hold meetings and seminars for persons of all faiths, and everything
would be very open.

But Kenneth Seidenberg, an attorney for Jack Tar Hotels, told the St.
Petersburg Times on Dec. 5 that the sale of the Fort Harrison was "one of
the strangest transactions we've ever dealt in." Southern Land Sales
wouldn't even give Jack Tar its telephone number, he said.

"We have never been involved in this cloak and dagger (kind of deal),"
Seidenberg said. "They have been so secretive that it has been driving us
crazy as to who they are and what they are."

United Churches was not the answer.

Documents recently released in the Washington trial of nine
Scientologists tell the real story. On Nov. 26, 1975 -- nine days before
Seidenberg expressed his frustration -- L. Ron Hubbard, founder and
commodore of the Church of Scientology, issued a secret Guardian Office
Order headed "Program LRH Security. Code Name: Power."

Flag, the church's program office, sort of a theology center, had been
at sea aboard the church-owned yacht Apollo for several years. The precise
reasons why the church maintained a headquarters operation on a ship are
not known. But now it was coming ashore. The quiet Gulf Coast city of
Clearwater had been chosen as the new site.

Hubbard's directive said the church should establish a permanent office
there. He stated the following goal: "Really attain PROAC (public relations
office area control) in the CW (Clearwater) operating area for the
organizations operating there, sort out any weak spots or potential threats
internal or external and handle ... Dynamite spots should be predicted far
in advance ... and handled before any repercussion occurs."

That same day, Henning Heldt, Scientology's deputy guardian for the
United States, received a letter from someone named Ron, which read: "We
have found a whole part of a condominium to rent. It is 5.3 miles from the
FH (Fort Harrison). We have been negotiating on it as a simple rental ...
It will be UC (United Churches) or SLD (Southern Land Development) -- I
don't know what name the mission is using for the negotiation.

"As the office of LRH (Hubbard) will be there, the bus and phone lines
will have to lead to there ...

"There will be an LRH private office at the FH (that is easy as I just
drive in the garage and enter the third floor garage elevator hall door and
go on up. There will possibly be a personal office at the bank bldg if they
get it clean. This is rougher as one has to step out of a car and walk to
the door)."

Ron told Heldt what he would be doing:

"Probably my best layout is to get very well known in the CW area with
a camera in my hand and my Universal News press card taking pictures of
'beautiful CW' which is the local button (they hate tourists and also
retired people). My photoshoot people will continue, as I have a whole org
(translation: organization) for that sort of thing ...

"So I think the exact plan will be that I play operations above
security, slide in on personal PR (translation: public relations) as that
well known photographer very visible with a whole crew camera in hand and
living in a nearby town. Not push it. Just let it seep in. My portrait of
the mayor will hang in city hall never fear ... And we count on your B1
(translation: information office) to very quickly pre-alert any trouble so
I can go fishing until you handle.

"AND WE COUNT ON YOU GUYS TO MOW IRS DOWN AND WIN ACROSS THE BOARDS.

"That is the way it will have to be played within the realities of the
scene ... So the program is attached."

Could this Ron have been LRH himself? Who knows?

Two days later -- Nov. 28, 1975: Heldt issued a new directive, "IRS:
Endure." He quoted Hubbard: "Views of the scene are optimistic at this
time. However knowing the insane, we must be fully prepared and positioned
to get right on operating throughout the U.S. and work until we get a
straight jacket on IRS no matter what they do ... Earlier I advised a new
corporation be set up in every org (organization) area in U.S. to parallel
the actions of each org and simply sit there dormant, but ready to hire the
old org's staff and continue, non successor, in new quarters."

The directive said: "Flag will continue to operate as C of S of C
(Church of Scientology of California). C of S of C will be leasing space
from United Churches of Florida, a non-profit corporation which will in
turn be leasing from the owner of the buildings."

The plan called for organizing "Dormant Corp." and "Mother Church
Corp." for possible future use should the church lose its tax exempt status
and IRS seize its assets. It also directed that means be found "of
safeguarding cash reserves from IRS seizure or wipe-out."

Dec. 5: With Clearwater folk still trying to decide what this United
Churches business was all about, the Guardian Office of Scientology issued
directives on Project Power.

One goal was to "establish the indispensability of United Churches" in
the community. The directive said:

"The overall plan is to locate opinion leaders -- then, their enemies,
the dirt, scandal, vested interest, crime of the enemies (with overt data
as much as possible). Then turn this over to UC who will approach the
opinion leader and get his agreement to look into a specific subject (which
will lead to the enemies' crimes). UC then 'discovers' the scandal, etc.,
and turns it over to the opinion leader for his use. Ops (operations) can
be done as a follow up if needed to remove or restrain the enemy.

"Example: B1 finds the Clearwater Mayor as an opinion leader and Mr.
Shultz as his enemy. Overt (and suitable guise) investigation of Shultz
shows him to like little girls and that he walks in the park every Sunday
when he attempts to drag little girls into the bushes. B1 turns this data
over to UC. UC goes to the Mayor and gets his OK to look into 'what can be
done to beautify Clearwater City Park.' Shortly after the mayor gives his
OK to look into the park, UC 'discovers' that there are undesirables in the
park and turns the data over to the Mayor. Several days later UC
'discovers' that Mr. Shultz molests little girls in the park and turns that
over to the Mayor managing to get press on the whole park campaign and to
make a friend out of the Mayor. Now if Shultz is also a potential enemy of
ours (which he might be after the above is done) and the Mayor or newspaper
hasn't removed him from a position of power the OPS (operations) does."

Church functionaries were directed "to fully investigate the Clearwater
city and county area so we can distinguish our friends from our enemies and
handle as needed". Dossiers were to be compiled on medical societies,
clinics, hospitals, police departments and agencies, public relations
firms, drug firms, federal, state and local government agencies, city
council, banks, investment houses, local representatives in Congress and
Florida's two U.S. senators.

Finally, the directive called for protecting "ourselves against any
potential threat by taking control of the key points in the Clearwater
area." This was to be accomplished by determining key news media and
political leaders and gaining either their allegiance or control over them.

It didn't work that way. Instead of winning the friendship of Mayor
Gabriel Cazares, United Churches -- which was still fronting for the Church
of Scientology at this time -- found him critical of their secrecy.

"I am discomfited by the increasing visibility of security personnel,
armed with billy clubs and Mace, employed by the United Churches of
Florida," the mayor said. "I am unable to understand why this degree of
security is required by a religious organization ..."

Reporters had been working diligently to find out who was behind United
Churches. They were finally successful. But on Jan. 28, just as they were
ready to publish their stories, Rev. Arthur J. Maren of Los Angeles arrived
in Clearwater for a news conference.

He announced that the Church of Scientology of California was the new
owner of the Fort Harrison and was also behind formation of United
Churches. The Church of Scientology had kept its involvement secret, he
said, because it didn't want to overshadow the work of United Churches.

The secret was out.

Stories about this new religion, Scientology, began appearing in The
St. Petersburg Times and the Clearwater Sun. Mayor Cazares continued his
criticism of the church and its methods.

And the church? Did it turn the other cheek?

Hardly. That's not part of Scientology's creed.

6. 'Priority' critics of church faced special handling

The secret was out.

It wasn't really United Churches of Florida that had taken over that
old Clearwater landmark, the Fort Harrison Hotel. It was the Church of
Scientology.

Citizens of Pinellas County received the word on Jan. 28, 1976 when
Rev. Arthur J. Maren, a national spokesman, came to Clearwater. He said the
Church of Scientology had kept the fact secret because it didn't want to
overshadow the good intentions of United Churches.

It's a wonder the truth hadn't come out before then. For L. Ron
Hubbard, founder of Scientology, was in town. Three Clearwater ministers
later recalled that he directed the taping of radio shows in which they had
been invited to participate by United Churches.

"He looked very impressive," Rev. Otis Green of Everybody's Tabernacle
said of the elusive Hubbard. He was dressed in an army-type khaki-colored
uniform with matching tam-o'-shanter, Green said.

Hubbard "came right in and started turning the knobs," Green said.
Wearing earphones, he directed people where to stand and was "putting all
the sound together."

Rev. R.L. Wicker of Calvary Temple of God said Hubbard displayed
"tremendous authority" at the taping of the show for his church. "They
introduced him to me as Mr. Hubbard, but that didn't mean anything to me --
they said he was an engineer," Rev. Wicker said. "When I saw his picture in
the paper, I felt like an idiot -- that I had really, truly been had."

Hubbard, like his church, was doing good deeds ... on the face of it.

There was such contrast between what Scientology did publicly in its
first few months in Clearwater, and what went on secretly in the Guardian
office in the Fort Harrison.

Oh, the church lost no time in letting the community know that its
velvet glove concealed a rock-hard fist. On Feb. 6, just a week after
Maren's announcement, the church filed a $1-million dollar lawsuit against
Mayor Gabriel Cazares -- a consistent critic of the secrecy with which
United Churches came to Clearwater -- accusing him of libel, slander and
violation of the church's civil rights.

But five days later, the public was invited to an open house at the
Fort Harrison. About 500 people showed up and they found the old hotel
looking better, cleaner.

Rev. Fred Ulan, flashing a big smile, greeted everyone and spoke of a
week of "ups and downs." He introduced Maren and, pointing at his head,
said: "See, no horns."

Maren told the crowd the Church of Scientology had come in peace and
good will.

"Scientologists are people who don't drink or violate laws," he said.
"They are friendly and want to contribute. We'd like you to give us the
right to have our viewpoint."

Peace? Good will?

The day after Maren had come to Clearwater, an official of the church
circulated copies of his "weekly report" to other church executives. Among
the problems he listed in typical Scientology report fashion was this one:

"SITUATION: Set of entheta (translation: unfavorable) articles
connection UCF (translation: United Churches) and Scientology and LRH
(translation: Hubbard) breaking now in the Flag area papers.

Flag was the church headquarters at the Fort Harrison. Bette Orsini of
The St. Petersburg Times, Mark Sableman of the Clearwater Sun, and Bob
Snyder of Radio Station WDCL, Dunedin, had been reporting on Scientology.
They were already marked for church operations to discredit them.

This report was among thousands of church documents -- its own and
documents that it had stolen -- that were released recently by a federal
court in Washington.

The day before Maren told the crowd at the hotel how Scientology wanted
to contribute, Joe Lisa, assistant guardian for information at Flag, sent
his weekly report to other church offices. Among the dozen situations cited
was this one:

"SITUATION: Chamber of Commerce has enemies on it that PR (public
relations) is not aware of.

"WHY: We did not liaise with PR to inform them.

"HANDLED: We compiled a list of enemies that we knew of at the Chamber
of Commerce and turned it over to DG PR US (deputy guardian for public
relations U.S.) for his and Flag PR Bureau's use in their planned handling
of the terminals at the Chamber of Commerce. Report sent."

On Feb. 17, Lisa wrote Jimmy Mulligan, an aide to Mrs. Hubbard on the
commodore's staff, that "a letter is going out to the Sun (one of those 5
day warning letters). Basically they are going to be warned not to print
anymore ... or else we will sue."

He also said, "Yesterday we turned over to PR scandal material for a Br
I PR (branch one) attack on the medicos in these here parts. I am also
having some follow up on this and am drawing up a project to get a large
scale attack going on nursing homes, medical centers, mental health and
psychiatric clinics. I'll be sending a copy up lines as soon as I get that
completed."

The next day, M.S. -- Mary Sue Hubbard, wife of the founder -- wrote
her assessment of the Clearwater scene to Dick Weigand, deputy guardian for
information, U.S. Of Mayor Cazares, she said: "He thought he had an
excellent handle on us politically and was using it to gain PR for himself
politically. He has nowhere to go except in the political arena. We were
the football that blew up on him when we did not prove out to be tied to
some gambling or other interests."

She gave her assessments of reporters Snyder and Sableman and of The
St. Petersburg Times.

"Of all," she said, "I consider the SPT (Times) to be the most
dangerous. Poyntec (?) obviously feels he owns this neck of the woods
morally, spiritually, politically and otherwise."

She was referring to Nelson Poynter, the Times' chairman of the board.

That March 19, the open face of Scientology announced that it was
selling the church's seagoing flagship, the 3,287-ton Apollo, because it
had established a new "land base" in Clearwater.

But the secret face was plotting. Eleven days later Mitchell Hermann
(who was also known as Mike Cooper), southeast U.S. secretary, wrote Lisa:
"Attached is a list of ops customers in order of priority. Please begin
(actually please continue) sending up ops on these folk. Robert Snyder,
Mayor Cazares, Poynter/Patterson, Steve Advokat (unless he shifts off the
heavy entheta)/Mike Pride/Stuart, Orsini/Andy Barnes, Nan McLean ..."

Eugene C. Patterson was editor and president, Bette Orsini a reporter
and Andrew Barnes the managing editor of The St. Petersburg Times. Ron
Stuart was the managing editor, Mike Pride the city editor and Steve
Advokat a reporter for the Clearwater Sun; Nan McLean was a disaffected
church member.

April came. The church announced it was doubling its professional staff
in Clearwater to handle an expansion of its program. About the same time,
Rev. Ulan, the newly-named director of United Churches, was accepted as a
member of the Clearwater Ministerial Association.

The church did not reveal the letter national operations officer
Raymond Windment (also known as Bruce Raymond) had written to Weigand.

"Dear Dick,

"Sitn: The "Bank" of CW is following the anti-C of S line of attack.

"Data: The Mayor of CW and the local press and others are attacking the
C of S.

"LRH's policy on (PR) Black Propaganda states something to the effect
of 'Black Propaganda if overused turns on its user.' (Actual quote: '...
Black Propaganda is not something one lightly instigates. For it recoils on
the person who uses it.')

"The attached OP is designed to get Base 'overattacked' but at the same
time to do no harm to Base.

"The idea is to 3P (attack) ourselves in such a manner that the persons
who continue to attack us seem to be Fascists, commie haters, and bigots.
This OP should make "Black" and Jewish allies if PR carries the ball.

"The OP is very simple to do.

"I've talked to SE SEC (southeast directorate secretary) about this and
he thinks that no harm could come out of it but that the letter should be
more pronounced in its bigotry.

"Love,

"Randy."

The attached scenario for the operation was labeled "OP Yellow." It
said that an anonymous letter should be mailed to all downtown Clearwater
businesses, particularly "ALL the Jewish ones." In fact, it said, to mail
it to businesses as far away as Tampa.

The suggested letter said:

"Fellow Clearwaterians (check spell)

"God bless the Mayor. He is a true Christian and the entire town should
be proud of him. He has stood up against un-Christian Scientology and God
is obviously with him.

"On the Scientology issues, the Mayor is right. We back him all the
way. But what we should also do is make sure no more undesirables move into
Clearwater.

"We kept the Miami Jews from moving in and turning beautiful Clearwater
into Miami Beach. The blacks in Clearwater are decent and know their place
..."

Peace? Good will?

While the church was publicly wooing citizens of Clearwater, behind the
scenes its agents were investigating public officials and civic leaders and
compiling dossiers on them.

On Feb. 21, a two-page report from Molly Harlow, collections officer
for Flag to Lisa provided biographical background on Clearwater City Atty.
Thomas Bustin. A May report furnished Lisa with pertinent data on The Upper
Pinellas County Association for Retarded Children. An information bureau
daily report said the investigation of county commissioners was almost
done.

A remarkable amount of time was spent by church officials in dealing
with people they perceived to be enemies or potential enemies. Remarkable
also was the complexity of the schemes they wove to discredit people and
organizations.

7. Church played dirty tricks on Cazares

In Clearwater in January 1976, Gabriel blew his horn.

No walls tumbled. But Mayor Gabriel Cazares' persistent questioning of
the motives of a new religious group that had tiptoed into town helped put
a crimp in plans of the Church of Scientology to quietly take control of
the city.

His whistle-blowing moved him to a high place on the hit list
maintained in the church's Guardian Office where officials spent their days
operating an espionage system and concocting dirty tricks to discredit
"enemies" of Scientology.

Schemes devised to handle Cazares were among the most vicious described
in church documents recently released by a federal court in Washington.

Scientology's spy operation was operating smoothly in the winter of
'76, and Cazares was destined to become enmeshed in wheels turning in
Washington.

L. Ron Hubbard, church founder and commodore, had come ashore in
Clearwater. The church had recently purchased the Fort Harrison Hotel for
a new base for Flag -- its program and theology center. The commodore, it
appears, was operating out of the King Arthur Courts condominium in Dunedin
where the church had rented one building of the five-building complex. Mary
Sue Hubbard, his wife and the commodore staff guardian, was on the scene.

The spy operation was focused on Washington where Mike Meisner,
assistant guardian for information D.C., was running agents (how to run
agents had been set forth in detail in a policy letter written some years
before by Hubbard). Gerald Bennett Wolfe, whose code name was "Silver," had
been employed as a clerk-typist at the Internal Revenue Service since
November 1974. Sharon Thomas had been working for the Coast Guard since
January 1975, but Meisner had given her orders to get a job at the Justice
Department. She went to work there on Jan. 29, 1976.

At the beginning of February, Meisner was ordered to Los Angeles for
briefings. While he was there, a Telex message came in from Jimmy Mulligan,
commodore staff guardian assistant for information, in Clearwater. He
wanted to know the situation regarding access to current information about
Scientology in the office of Lewis Hubbard, an IRS official.

Meisner prepared a reply. He said that he and Silver had broken into
Lewis Hubbard's office three weeks earlier with the help of Don Alverzo, a
church agent who had been sent to Washington from Los Angeles to help
because he knew how to pick locks. They found only old data on Scientology,
he said.

"I found a note on Hubbard's desk that said something like 'See
Friedberg re Scn'," Meisner said. "From that note I assumed that Friedberg
(Stephen) was handling the PT (translation: recent) Scn material ... Last
week we obtained access to Friedberg's area by leaving one of the doors
unlocked during the day ... Friedberg had material on the Calif. scene
dated as late as 26 Jan. 76 ... The PT material was sent upline last week."

(Keep Meisner in mind. In the summer of 1977, he turned himself in to
the FBI. Information that he provided led to raids on church offices and
confiscation of 48,149 documents that were the basis for the indictment and
convictions in Washington of nine Scientologists -- including Mary Sue
Hubbard, Wolfe and Ms. Thomas.)

Back in Clearwater, Guardian office officials were weighing how they
could silence Gabriel's horn.

A six-page list of LRH (Hubbard) orders from about this time has
several references to Cazares:

"5/2/76 (Feb. 2) Cazares -- Possibly Jimmy Fischer could get his school
records.

"15/3/76 (March 3) Cazares -- is there some possibility the Cubans in
Miami might get the idea he is pro-Castro?"

On Feb. 7, the church filed a $1-million lawsuit in U.S. District Court
charging that the mayor had libeled and slandered the church and violated
its civil rights. On Feb. 28, Cazares replied to the church's libel suit
with an $8-million libel suit of his own.

He would have been surprised to know that two days earlier church
agents were in Alpine, Texas digging through records in the county clerk's
office, the police department, the office of the Border Patrol, the
Catholic Church, talking with local doctors, the midwife, long-time
residents, looking for information on him. They even visited the graveyard
looking for headstones bearing the Cazares name.

In a "Mission Report," Mike C. (Mitchell Hermann) stated: "The mission
went to Alpine and succeeded in getting a good amount of legally useable
affidavits and letters to support the fact that Cazares was not born in
Alpine, Tex. The mission also located a newspaper article announcing the
birth of a baby named 'Alpine Bill' Cazares on Jan. 30, 1920, to a father
with the same initials (J.O. Cazares) as that of Gabriel's father."

A few days later, Hermann wrote Duke Snider, deputy deputy guardian for
the U.S., that Cazares would be in Washington for a national mayor's
conference March 13-17. "I am now working on a set of Ops (operations) type
actions which could be done to welcome the mayor to the nation's capital,"
he said.

What happened then was described by government attorneys in a
"Sentencing Memorandum" to U.S. District Judge Charles R. Richey in
Washington earlier this month as he prepared to sentence the nine
Scientologists.

"Shortly thereafter," the memorandum said, "defendant Hermann ordered
Mr. Meisner to carry out an operation on Mayor Cazares during his
Washington trip -- that operation was to involve a fake hit-and-run
accident. Defendant Sharon Thomas was to be the main participant in that
operation. She was to meet Mayor Cazares, drive him around town, and at a
predetermined location stage a hit-and-run accident with Mr. Meisner as the
'victim.'

"At the same time that defendant Hermann was directing Mr. Meisner to
carry out the 'accident,' defendant (Dick) Weigand responded to defendant
Snider's earlier orders by sending him a list of Clearwater, Fla.,
'enemies' and their priority for 'handling' purposes. Mayor Cazares ranked
second on the defendants Weigand's and Snider's list, right behind the St.
Petersburg Times.

"On March 14, 1976, District of Columbia Collections Officer Joseph
Alesi, posing as a reporter, interviewed Mayor Cazares. During that
interview, he met defendant Sharon Thomas. Thomas then offered to show
Mayor Cazares the town. During that drive, defendant Thomas, who was
driving, staged her fake hit-and-run accident in Rock Creek Park, hitting
Michael Meisner. She drove on without reporting the incident to the police.
Of course, defendant Thomas knew that no harm had been caused to the
'victim.' In a letter dated March 15, 1976, to CSG Assistant for
Information Jimmy Mulligan and fugitive defendant Morris (Mo) Budlong,
defendant Weigand discussed how Scientology could use that 'fake' accident
against Mayor Cazares and concluded that 'I should think that the Mayor's
political days are at an end'."

The church did not use the hit-and-run incident against Cazares
immediately. That would come later.

Meanwhile, the Guardian Office was working on "Operation Italian Fog."
It was a simple Op, said Randy (National Operations Office Bruce Raymond,
also known as Randy Windment) in a March 23 letter to Dick and Greg. "The
purpose of this Op," he said, "is to actually get real documentation into
the files of Mexican license bureau of bureaus stating that the Mayor got
married to some Mexican gal 25 years ago who is not his wife so puts the
mayor in a position of bigamy. This can be accomplished either by a bribe
or a covert action. Once the docs are planted, it is cleverly exposed that
the Mayor is promiscuous and a bigamist."

The detailed plan for the operation was written April 9. It was
accompanied by a handwritten note that said: "As part of the security, if
a bribe is used data should be given to the person accepting the bribe to
pinpoint a false Who in his mind, ideally one of the Mayor's known enemies
so that if the Op gets blown up to the person who was bribed that person
would give data on the planted Who and S. (Scientology) would never come
up."

Cazares, a Democrat, was by then a candidate for the congressional seat
held by Republican Rep. C.W. Bill Young. The church worked hard to hurt his
campaign. The congressman said recently that Steven Heard, a church public
relations official, offered over lunch with Douglas Gregory, Young's
administrative assistant, to supply the congressman with information that
could damage Cazares' campaign. Gregory -- and a day later Young, by letter
-- refused the offer.

On July 12, Operation Keller was given a green light. Its stated
purpose was "to create havoc and possible political decay for Cazares."

Within a few days, fake letters from "Sharon T" were mailed by church
agents to political leaders and reporters in Pinellas County. The letters
said Cazares had been involved in a hit-and-run accident in Washington.

Cazares asked the FBI to investigate. Young received a letter saying
the "Sharon T" letter was really authored by the Cazares campaign to make
it look like Young was involved in dirty tricks. He turned it over to the
FBI.

In an Oct. 7 weekly report, Dick Weigand told Mo Budlong that the
handling of the mayor was continuing. "A recent poll conducted by the CW
Sun received phony responses from the public generated covertly which
showed that his opponent had a crushing lead on him," Weigand said.

And on Nov. 3, 1976, Joe Lisa informed Duke Snider that Mayor Cazares
had been defeated in the congressional race as a result of Guardian Program
Order 398 -- an operation to create strife between Cazares and the city
commission, and to place a church agent in his campaign organization to
create problems -- and other Scientology actions which included "spreading
rumors inside his camp, contributing to disorganization in his campaign."

The church's libel suit against Cazares was dismissed by U.S. District
Judge Ben Krentzman in Tampa in the spring of '77. The church later dropped
two other suits against Cazares, and he withdrew his suit against the
church.

8. Operation Bunny Bust

The Guardians of Scientology called their scheme to "restrain Orsini"
Operation Bunny Bust.

It is worthy of full description, now that its dimensions have been
laid out in Scientology documents made public by a federal court in
Washington. For it demonstrates the callous disregard of the Church of
Scientology's Guardian Office for the innocent when it embarks on an
operation against someone it has decided is an enemy.

St. Petersburg Times reporter Bette Orsini had dug deeply into the
background of Scientology and its founder, science fiction writer L. Ron
Hubbard, in the early weeks of 1976. She was writing a great deal about
them. In their new offices in the old Fort Harrison Hotel in Clearwater,
the Guardians placed her near the top of their enemies list.

They were aware of the scope of her investigations. "Silver," their
secret agent in the headquarters of the Internal Revenue Service in
Washington who spent his weekends copying IRS documents and passing them
along to the Guardian Office, came across the tracks of Mrs. Orsini's
investigation.

He supplied them, for example, with a copy of a February 1976 letter
>from reporter Orsini to Richard Arter, public affairs officer of the
Philadelphia Service Center, requesting copies of the applications
submitted by 14 churches of Scientology for tax exempt status.

On Jan. 26, 1976, two days before the Church of Scientology
acknowledged that it was the new owner of the Fort Harrison Hotel, the
assistant guardian for information at Flag -- the church headquarters
occupying the hotel -- outlined in a letter to the deputy guardian for
information U.S. a program "to get Bette Orsini removed from a position of
power and attack at The St. Petersburg Times.

Scientologist Joe Lisa suggested to Dick Weigand that an agent posing
as an aide to some local Mafia figure go to the Times office and leave $100
for Mrs. Orsini with an editor, hinting that it was a payoff to her for
supplying the Mafia with information from Times files. There is no
indication that "Operation Information" was ever attempted.

On Feb. 4, the church did threaten Mrs. Orsini and The Times with a
libel suit. The Times retaliated eight days later by filing suit to enjoin
the church from harassing Mrs. Orsini and other Times' reporters.

The suit never came to trial. Early in 1977, Editor and President
Eugene Patterson announced The Times was withdrawing the lawsuit.

"We made no deals with the Scientologists whatsoever," Patterson said.
"There was no settlement. We simply instructed our attorneys to file a
notice of voluntary dismissal without prejudice, rather than risk bringing
harm to a completely innocent organization that might have lacked the means
to defend itself against the Scientologists."

It can now be told that the organization was the Easter Seal Society
for Crippled Children and Adults of Pinellas County Inc.

On July 15, 1976, Dick Weigand informed Morris (Mo) Budlong, deputy
guardian for information worldwide, that information had been collected on
Mrs. Orsini.

"Preliminary investigation into her husband Andrew Orsini who is the
head of Easter Seal of Pinellas County uncovered that the group had their
corporation dissolved by the Florida Secretary of State in 1972-1973 for
not filing an annual report. A project has been drawn up and is now being
implemented to show Easter Seal Society that Orsini (the executive
secretary) has been operating as a fraud and has broken laws. This data is
intended for a PR (public relations) attack."

The operation began that November when an anonymous letter was mailed
to various newspapers in Florida and to the St. Petersburg Consumer Affairs
Department, the St. Petersburg Charitable Solicitations Board and the state
attorney's office. The letter purported to be from a wealthy businessman.

It began: "I have, for many years, supported worthwhile charitable
causes which benefit the handicapped, mentally retarded and the needy. Not
just for personal reasons guaranteed me under law for tax purposes but
because I always cared about the less fortunate than myself, both
financially and physically. I have in the past donated large amounts of
money to one such organization which, until recently, I thought was a
worthwhile group."

Recently, this "businessman" said, he had been informed by his attorney
that his contributions to the Easter Seal Society might not be tax
deductible. He said he had begun "an exhaustive independent probe" that
found criminal misconduct in the financial and administrative affairs of
the Easter Seal Society. The letter called for the issuance of an arrest
warrant for Executive Director Orsini and his prosecution. It was
accompanied by copies of documents from the Florida secretary of state's
office.

The Times assigned reporter Chris Cubbison to investigate the
allegations. He found them false. The charges were constructed around an
administrative mistake. The state had sent the Easter Seal Society's
franchise tax form to the wrong address, the tax was not paid, the
corporate charter was revoked as forfeited, and the society was dissolved
by proclamation. The error had been remedied by payment of the fee long
before the Scientologists moved into Clearwater.

Bette Orsini was assigned to trace the source of the letter. She found
that someone had purchased copies of the secretary of state's complete file
on the Easter Seal Society on July 12-13, 1976. She traced the money order
used for payment to Ben A. Shaw, and found that he had represented himself
to the Division of Licensing in Miami as a reporter for a University of
Florida newspaper. Shaw was, in fact, administrative assistant to the
president of the Church of Scientology of Florida.

He was subpoenaed and a deposition was taken. Shaw denied he had
written the anonymous letter and claimed he knew nothing about it. He gave
as his reason for spending $52 of Scientology funds to copy the entire
Easter Seal Society file that it somehow pertained to an investigation of
Pinellas County State Attorney James Russell's connection with the society.
However, he could not explain anything he had done or planned to do with
the information. He said he had given copies to one other person who he
refused to name.

In a file memorandum, John M. Bray, a Washington attorney representing
The Times, related the attack on the Easter Seal Society to Scientology
policies of founder L. Ron Hubbard. He said:

"The technique of using anonymous or covert methods to destroy an
enemy's reputation is a Hubbard tactic called 'Black Propaganda.'
Instruction in the use of this technique is contained in a set of books
used by all Scientology organizations ... This policy directive states that
'the most involved employment of PR (public relations) is its covert use in
destroying the repute of individuals and groups. More correctly, this is
technically called BLACK PROPAGANDA. Basically, it is an intelligence
technique.' He cautions that 'it can be a serious error to cross
intelligence and PR.' 'Noisy Investigations' are described as follows ...:
"When we investigate we do so noisily always. And usually mere
investigation damps out the trouble even when we discover no really
pertinent facts ... Remember, intelligence we get with a whisper.
Investigation we do with a yell. Always ...'

"Finally, there is the following blunt description of the technique:
'The technique is: A hidden source injects lies and derogatory data into
public view.'"

Reporter Orsini traced other documents obtained in Tallahassee to R.
Wanda Martin who lived in an apartment at 704 1/2 Oak Avenue in Clearwater.
A divorcee, she was a former Navy Department employee who had moved to
Clearwater in late '75 or early '76 and taken a job with the Clearwater
Chamber of Commerce. She gave as a reference Hubbert Alan of Hollywood,
Calif., who was found to be a minister of Scientology.

Her roommate in Clearwater was June Phillips (also known as June Byrne)
>from England, who was employed by the Clearwater Sun.

In April 1977, Mary Sue Hubbard, wife of Scientology's founder and
commodore staff guardian, wrote Weigand: "Please explain what the scene is
-- was the same person used in the Easter Seal scene used at the CW Sun and
also used in the AMA (American Medical Association)? What are the
liabilities here?"

On May 12, Weigand replied: "Basically the scene is that we had two
agents one in the CW Sun and one in the CW Chamber of Commerce. The Chamber
of Commerce agent was used in the Easter Seal operation, not the CW Sun
agent but the clincher is that both of these agents were in the AMA and had
previously been blown." He said the liabilities of the situation were that
agents Martin and Phillips could be traced back to Mike Meisner in
Washington.

Meisner, the supervisor of "Silver" and other church agents who had
infiltrated government agencies in Washington, was then being sought by the
FBI on a fugitive warrant.

Weigand explained to Mrs. Hubbard that June Phillips had been placed at
the American Medical Association offices in Washington in 1974, where she
stole AMA documents relating to Scientology, but was pulled out in 1975
when her connection with the church became known. She was sent to
Clearwater where she worked as a church agent at the Sun. Wanda Martin, or
Jodie, was also placed at AMA but transferred to Clearwater after her
connection with the church became known.

Weigand said the situation was alarming. "The chain does lead to Orsini
uncovering a Church operative network that could be used as a handle for a
Grand Jury investigation of the Church activities which would include the
Meisner/Silver scene."

Before Bette Orsini could connect the Bunny Bust operatives to a church
espionage network, however, Meisner surrendered to the FBI. Information he
supplied led to raids on church offices in which documents were seized that
led to indictment of 11 Scientologists, including Mary Sue Hubbard.

9. St. Petersburg Times topped 'enemies' list

"Poynter is a millionaire: Does he have a butler, maid, cook, shofer
(sic), gardener, etc. Put an FSM onto one of these things and get the low
down on he and his wife."

That cryptic note, with no addressee or signature, was among the
thousands of Church of Scientology documents recently released in
connection with the trial of nine Scientologists in a federal court in
Washington.

Poynter? Nelson Poynter, late chairman of the board of The St.
Petersburg Times. FSM? Church lingo for a secret agent, a spy.

Obviously that note was just one small paragraph in a huge ongoing
program of the Guardian Office of the Church of Scientology to "handle" The
St. Petersburg Times, the organization it placed at the top of its enemies
list in the Clearwater area in the early days of 1976.

Times reporter Bette Orsini discovered that January that the new owner
of the Fort Harrison Hotel in Clearwater was the Church of Scientology of
California, and that United Churches of Florida, which had moved into the
hotel in December, was a Scientology front. The Times was preparing to
print her story when, on Jan. 28, Scientology announced it was the new
owner.

The Times came quickly to the attention of the guardians of the
publicity-shy church because of Mrs. Orsini's stories on Scientology's
background and the stories of reporters Susan Denley and Ardith Hilliard on
the developing controversy between the church and the citizenry of
Clearwater.

But the church already knew a great deal about The Times.

Two months earlier, on Nov. 18, 1975, a "missionaire" names Sandy
provided church officials with a six-page rundown on the history of The
Times and the backgrounds of its owner, Nelson Poynter, and executives.

The Guardian Office struck quickly with its standard plan for silencing
-- or attempting to silence -- newspapers that write about it. On Feb. 4,
Clearwater attorney Jack F. White Jr., representing the Church of
Scientology of California, sent a letter to The Times and Mrs. Orsini.

"Gentlemen," it began, "This is your notice under Chapter 770.01,
Florida Statutes, that our clients intend to institute action against you
for libel, including disparagement of title to real property and possibly
for invasion of privacy, for the following publication, which we consider
libelous." It cited two paragraphs of a story by Mrs. Orsini in which she
described the workings of an E-meter, a device used by the church in
auditing.

The letter was a threat of suit; no suit was filed.

Documents released by the federal court in Washington show that on Feb.
11 -- one week after that threat was made -- Duke Snider, deputy deputy
guardian U.S., wrote Henning Heldt, deputy guardian U.S., that he had come
up with an excellent defence should anyone accuse the church of trying to
silence The Times.

"There are 3 papers here, the CW Sun, St. Pete Times, Tampa Tribune,"
he said. "The CW Sun and St. Pete Times printed the most stuff. Tampa ran
a lesser amount but still some entheta (translation: unfavorable
publicity).

"When we sent out the letters threatening libel we did not have time to
get around to the Tribune, they had printed less, but still some entheta
and we wanted to go over their articles more carefully."

Just that day, he said, his office was preparing to send a letter to
the Tribune threatening a suit, but then his plan came to mind.

"So with the Tribune (Tampa)," Snider said, "we do not threaten any
action but just let PR (public relations) handle. As a defence we then
point to them and say 'We didn't threaten them or try to shut them up, it's
just those who are completely unreasonable or unfair and despite all our
best efforts will not stop printing falsehoods that require us to take
recourse to legal action'."

On Feb. 12, The St. Petersburg Times and reporters Orsini, Denley and
Hilliard filed a lawsuit in Pinellas County Circuit Court charging that the
Church of Scientology of California, United Churches of Florida, L. Ron
Hubbard, founder of Scientology, and Sorel Allen, United Churches'
membership director, "have conspired ... to harass, intimidate, frighten,
prosecute, slander, defame" Times employees. It asked the court to enjoin
them from further harassment.

The suit did not faze the Guardian Office. It accelerated its plans for
The Times.

In his weekly report of Feb. 19, Joe, the acting guardian for
information at Flag -- the church headquarters in the Fort Harrison -- said
an agent of the church had applied for employment at The Times. (A month
later, a letter to Snider from Dick Weigand showed the priority the church
was placing in its operations against The Times. Weigand's letter said that
Snider "asked for a chart of enemy lines used up to this point for CW
attack after research of the files was done ... from this I see the areas
of priority to infiltrate are 1. SPT (translation: St. Petersburg Times),
2. Mayor, 3. Channel 13 TV, 4. Snyder (meaning radio broadcaster Robert
Snyder), 5. Florida Attorney General and 6. Florida State Attorney
(Russell).")

Joe also said he was trying to get information from the law firm
representing The Times.

"We have located a potential FSM (covert agent) who meets the
qualifications to be a legal secretary and we will be checking her out for
possible placement," he said.

There was fear that Hubbard would be served with a subpoena in The
Times' suit, but that had been handled, Joe said. "The defendant of the
suit is no longer in the area to get served along with Sorel Allen, who
left as well."

The Guardians were successful in getting confidential information from
the files of Baynard, McLeod, Lang and Ballard, the law firm representing
The Times. It was never established whether the information was obtained by
a Scientologist employed by the firm or by burglary.

On March 7, Tom Ritchie, the collections officer for Flag, circulated
to other church offices a 13-page "raw data report" on the contents of The
Times' file at the law firm.

The report began: "William Ballard of Baynard, McLeod, Lang & Ballard,
the attorneys for the St. Pete Times, is working off the following data in
their case against us." The report cited articles about Scientology that
The Times had collected, memoranda of Times' reporters and editors,
memoranda on reporters' interviews, letters from Ballard to John M. Bray of
the Washington law firm representing The Times, and so on.

One citation was prophetic. It concerned an Orsini memorandum on an
interview with Paulette Cooper who wrote a book about Scientology and was
given full enemy treatment by the church. Among the portions of the Orsini
memorandum quoted in the "raw data report" was this: "She warned me that
the Scientologists send anonymous smear letters."

One day later, Ritchie was reporting on "Bette Orsini Notes to Bill
Ballard," a lengthy distillation of a series of memoranda from the reporter
to the attorney for use in connection with The Times lawsuit.

In Washington, Scientology agents ransacked The Times' file in the law
firm of Arent Fox Kinter Plotkin & Kahn. According to a government
document, "At least three burglaries were committed during the early months
of 1976" at the law office. "These burglaries and thefts of documents were
carried out pursuant to the orders of defendant Mitchell Hermann. In
February 1976 two entries were made into the office of Jack Bray and his
secretary at the above-mentioned law firm, the first one by Richard Kimmel,
the acting assistant guardian for information in the District of Columbia,
and the second one by Kimmel and Michael Meisner." On each occasion,
according to the document, papers relating to The Times lawsuit against the
Scientologists were taken.

The March 11 weekly report of the D.C. information office stated:
"Information was obtained from the DC law firm representing the Times
Publishing Company. This information included a 60-page timetrack of
activities by Bette Orsini, the entheta (translation: giving the church bad
publicity) writer with The Times; data indicating that the suit was quickly
filed at the behest of Nelson Poynter to 'gain the initiative'; information
about Orsini's sources including Paulette Cooper, the Liebermans (connected
with the psychological kidnapping scene), AMA, FDA, etc. ..."

The same report said that additional data collection on Nelson Poynter
had been carried out in D.C.

From their research, the guardians knew that Times President Gene
Patterson was second in command and would likely succeed Poynter as chief
executive officer of the firm. Guardian Randy Windment proposed to cause a
split in the top management of The Times by discrediting Patterson with
Poynter. He called his proposal Operation Fickle.

The complex plan called for a woman, posing as a relative gathering
information for a political science student, to call Mrs. Patterson and
tape an interview with her. The questions would be cleverly phrased so the
answers could be made to appear critical of Poynter's management of The
Times. The interview would be leaked to "an enemy paper."

"If the OP went down perfectly as planned," Windment said, "it would
cause both Patterson and Poynter to be the laughing stocks of the newspaper
world."

But Windment's superior, G.W., refused to approve it. "I'm not at all
certain this OP, even if done all the way through without bugs, would have
enough of an affect (sic) to make it worth the resources expended," he
said. "... Would anyone really be interested in such a story -- and if so
I think that media person would check directly with Mrs. Patterson to
discuss the 'controversy' at which point Mrs. Patterson would deny that she
meant such and such ..."

In the April edition of FREEDOM, the newspaper of Scientology, "A
Freedom Special Report" stated that Poynter "was allegedly an employee of
the Central Intelligence Agency." There were accompanying photographs of
security equipment at The Times and a caption that said "extensive security
measures suggest something more high-powered than routine newspaper
functions."

The August/September edition of FREEDOM said The Times was included on
a list of organizations connected with the CIA by "a West Coast
publication, the News Novel."

Patterson sent a copy of the FREEDOM article to George Bush, then
director of the CIA. Bush replied that the charge that Poynter worked for
his agency was false.

"I would be remiss if I didn't make one additional comment, which is
totally unrelated to Mr. Poynter," Bush said. "I think it is a sorry state
of affairs when a person can be 'smeared' by an allegation that he worked
for the CIA. I recognize the sensitivity between journalists and CIA, and
indeed we have taken steps here to make things better; but I still come
back to the fact that it is a shame when the climate is such that
cooperating with the CIA in some way leaves one open to a 'smear' attack."

During World War II Poynter served as a deputy to Gen. William "Wild
Bill" Donovan, head of the Office of Strategic Services. In this capacity
he helped to activate the U.S. information agency that founded the Voice of
America.

Early in 1977, The Times dropped its suit against the church. The
company announced it was doing so rather than present evidence that could
have harmed an innocent third party.

Paulette Cooper had been right in her warning to Bette Orsini. The
church had used an anonymous smear letter to hit reporter Orsini from the
blind side.

10. Church infiltrated the Clearwater Sun

When the Church of Scientology came silently and secretly into
Clearwater near the end of 1975, June came with it.

She took a job at the Clearwater Sun and when, on Jan. 28, 1976 a
Scientology spokesman announced that the church was the new owner of the
Fort Harrison Hotel, she was already bustin' out all over.

But a church document -- one of several recently released by a federal
court in Washington that detail her activities -- show that the Guardians
were worried about her future.

Jimmy Mulligan, the commodore staff guardian assistant for information,
wrote Dick Weigand, deputy guardian for information U.S., that a private
investigator "gave info to the DEA last November implicating June Byrne
(one of our AMA plants) in drug dealing; and causing her to be wanted for
questioning by the DEA."

"Meanwhile, back at the ranch, we have J.B. working here, using her own
Social Security number ... but a false name. Further, although she is a
permanent resident, she is not an American citizen ... It should be no
great task for the DEA to locate her should they avail themselves of social
security records ...

"So, Dick, I would like for you to put your thinking cap on and work
out the best way to handle the current scene concerning her. Her placement
(CW Sun) is very valuable and I would not like to have the data source
completely lost to us at this time."

She was using the name June Phillips. According to the Sun she was
given a job in the advertising department but later became a clerk in the
newsroom.

On Feb. 7, she passed along information that Sun reporter Mark Sableman
spent six hours the previous night writing his story on a $1-million suit
being filed against Mayor Gabriel Cazares by the Church of Scientology. The
suit, she said, caused a great deal of tension in the newsroom.

She was not the only weapon the church employed in its effort to stop
the newspaper from writing articles about Scientology. The church also
threatened the Sun with a libel suit.

On Feb. 9, Duke Snider, deputy deputy guardian U.S., reported to
Henning Heldt, his immediate superior, that Mary Sue Hubbard, wife of
church founder L. Ron Hubbard, had approved a plan to have a church
attorney tell Sun officials the newspaper "could get off the hook" by
printing an apology.

A church attorney met with Editor Al Hutchinson and the Sun's attorney,
Snider said.

"The conversation took place for over an hour and rapport was
established by our attorney," he said. "They spent a lot of time trying to
convince him that they hadn't printed any libel. He listened to this and
told them that he had advised us the articles were libelous.

"In the end they said that all they would print would be an article of
clarification ... To apply further pressure, our attorney said that he
would review several articles which he had not read and that they had
pointed out corrected things they said earlier that we requested be
corrected and that he would then call them back. He is also preparing a new
letter to them outlining each and every item which we wish corrected from
every article."

June was doing well by Feb. 19, reporting that Sableman had contacted
a reporter for a newspaper in the Bahamas about movements of the Apollo,
flagship of Scientology before Flag moved into a land base at the Fort
Harrison. She said Sableman had a copy of Paulette Cooper's book, The
Scandal of Scientology. She filed almost daily reports.

Her prospects looked even better. In a church document dated Feb. 21,
it was reported that "she is being grooved in to be a reporter."

But late in February, Don Alverso, director of Branch I information for
Flag, reported that June had a problem. A Sun reporter "has been putting
some pressure on our girl in the area of 2-D," he said.

In the jargon of Scientology, 2-D is the Second Dynamic: Sex.

"Apparently he would like to get something started with her in this
area," said Alverso. "I told her to stay in comm (communication) with him
and not to ARC-X the guy but to gently discourage him while letting him
know that it was her fault, not his as she is pretty screwed up after her
last 2-D experience, and is not ready to get involved again.

"I told her that she could go out with him occasionally for dinner, but
nothing more serious, and to make this known from the beginning. She
understood completely and has absolutely no intention of getting involved
with this guy who, incidentally, she has a hard time of bearing at all. She
does get good data from him on Scn."

June's reports were passed along to other Guardians by Tom Ritchie,
collections officer for Flag.
March 8: "There will be an article in tomorrow's Clearwater Sun by Mark
Sableman on C of S tax exemption. The article will state that the church
stands to save $50,000 by claiming tax exempt status ..."

March 9: "Sableman, CW Sun reporter, had a tape of last night's Jim
Dick show, 'This Thing Called Scientology.' While reviewing the tape
Sableman stated that he didn't know what his next plan of action would be
and that he would have to get in comm with Ron Stuart, the managing editor
on it ..."

March 11: "As you know, CW Sun reporter Stephen Advokat went to Canada
to interview the McLeans for a story on us. It was previously reported that
he would be staying in a ski resort outside Toronto, which he may well
have, but as of this evening he is staying with the McLeans themselves.
They are reportedly very 'chummy.' Last night CW Sun reporter Mark Sableman
spoke with a disaffected Scientologist in this area. We as yet do not have
the name of this person ..."

On March 17, June struck paydirt. She reported that Assistant City
Editor Tom Coat, posing as a freelance photographer, was taking a
Scientology communications course at the Tampa mission. "Coat says that he
hates doing the comm course and that it is sheer drudgery," the report
stated. "Coat states that he was doing the course so that he could do a
story on Scientology. Coat is scheduled to graduate from the comm course
tomorrow night."

At his final session, Coat was exposed by church officials. In a press
release, the church accused Coat of infiltrating their Tampa mission,
located in a storefront center across the street from the University of
Tampa. A few days later the church filed a $250,000 damage suit in Tampa
against Coat and the Clearwater Sun accusing them of violating the privacy
and confidentiality of the church by having Coat join it under false
pretenses and then take part in an advanced training course.

In her report on the law suit, June said Coat learned about it while
driving along the beach. "He went into shock," the report said. "Today he
was shaking like a leaf wondering just what we could do to him."

If a word was said in the Sun newsroom about Scientology, June reported
it. She peeked at reporter's notes, at editor's appointment pads. She
passed along information about John and Nan McLean, two disaffected
Scientologists from Canada, coming to Clearwater. On the basis of her
information, public relations officials of the church walked in on a
private meeting between the McLeans and Mayor Cazares.

She reported that the Sun planned to compile its articles on
Scientology into a book and the joke around the newsroom was that it would
be entitled "All Hubbard's Men."

Managing editor Stuart had been given a dart board by Sableman and
Advokat that had Scientology across the top of it and a picture of founder
Hubbard as the bullseye, she reported. "He kept hitting the bullseye," she
added.

On April 29, Weigand received a report from Sunrise Mission on
Operation China Shop, an investigation of the financial status of the
Clearwater Sun. "Our target on this, very confidentially, is ownership or
control of the paper," the report said.

Apparently no effort was ever made by the church to buy the Sun. But on
May 11, 1976, church officials visited the Greensboro, N.C. offices of the
Jefferson Pilot Corp., owner of the Sun.

The purpose of the visit, a church document states, was "to halt the CW
Sun publication by bypassing up the Org (organization) board to the very
top ... meeting with officials there and obtaining their aid in stopping
the CW Sun, which they own, from printing a booklet on Scientology."

The church team first met with Howard Holderness, chairman of the
corporation, and he referred them to the associate general counsel, Robert
H. Koonts.

Steve Heard, director of Branch I public relations for Flag, wrote Fred
Rock, assistant guardian for public relations for Flag, that the team gave
Koonts a copy of what the Sun had written and told him the church was not
anxious to sue.

"He then stressed how his organization had better things to do than
fight court battles and that we probably did too," Heard said. Koonts asked
what could be done about the suit against the Sun and Coat, he said, and
"we told him that we could only talk to the Board of Directors" but that
the church always tried to resolve things through constructive
communication.

"He then said that the fact that we came up to North Carolina surely
indicated something about us (i.e. our good faith) and suggested that we
talk to our board and then get back to him and that he would then come down
here and see us and hopefully work things out," Heard said. "He again
brought up such things as handling the 'direction of the Sun' re
Scientology and added for us not to worry about the booklet."

Heard concluded: "It appears that he will stop the Sun from putting out
the booklet."

And soon after came this report from inside the Sun: "Latest feedback
indicates the book is stopped -- negatives for the book are gone, Stuart's
Scn dart board has disappeared."

11. Church tried to infiltrate Pinellas police agencies

Now note this date: Dec. 17, 1975.

That was a full month before the Church of Scientology announced it had
purchased that old Clearwater landmark, the Fort Harrison Hotel. Citizens
of the city were still being fed nonsense about some ecumenical group
called United Churches of Florida occupying the building.

But the Guardians of Scientology had already moved into Clearwater and
were looking for places where they could insinuate themselves into the
community fabric to establish listening posts for gathering information.

On that Dec. 17, Jimmy Mulligan, an assistant to Commodore Staff
Guardian Mary Sue Hubbard, wrote Dick Weigand, deputy guardian for
information U.S., about a visit he had made to the Clearwater Police
Department.

In the letter -- one of the thousands of church documents recently made
public by a federal court in Washington -- Mulligan said he had learned the
Clearwater department planned to combine its communications with those of
police departments in Dunedin and Largo.

"The way this will work," he said, "is that all calls to the police of
any of these towns will come into the Clearwater Police communications
center, and the various police cars of the various police departments will
be dispatched from there.

"The main point is that at that time -- April 1976 -- the
communications center is going 'all civilian.' In other words they are
going to relieve the uniformed policemen of those clerical duties so that
they can get onto production posts, and staff the communications center
with all civilians. At present, it's about half and half. The civilians by
my observation are all lovely young ladies -- 100 percent foxes.

"I think this is an excellent opportunity for us and I would like to
see us represented in that communications center."

Information was the lifeblood of the Guardians' covert operations
against those whom they perceived to be enemies of Scientology, information
they could use to defame and discredit the enemies.

The St. Petersburg Police Department became an enemy about mid-February
of 1976.

Church officials in Clearwater had filed requests with virtually every
state, county and local agency in the Tampa Bay area for copies of
everything in their files about Scientology. They made their requests to
federal agencies under the Freedom of Information Act and to state and
local agencies under Florida's public documents disclosure law.

The St. Petersburg Police Department reported it had no files on the
church. But the Guardian learned from an informant that the department's
intelligence division had two Scientology files, Numbers 251 and 164.

Henning Heldt, deputy guardian for the United States, decided that an
example should be made of the St. Petersburg police. He ordered an
operation against them.

"The idea here is to get the police and other agencies involved in the
illegal evasion to lie and thus box themselves in, then expose the lie
(possibly through State Ethics Committee action) with maximum PR (public
relations) and legal exposure of government overts re FOI evasion," he
said. "A Watergate set up."

Having made a national splash, he said, the church could then target
other police departments, such as that in the District of Columbia, for
similar operations.

For some reason, the operation wasn't carried out. But the Guardians
learned from one of their agents what the police files contained. This was
reported in an analysis dated July 13.

State Atty. James Russell became a nonfriend of Scientology as a result
of the guns case, which began in early August and stretched on into 1977.

For a time in '76, the church occupied one building of the King
Arthur's Court Condominiums in Dunedin. It appears from the court-released
documents that founder L. Ron Hubbard lived there for a time.

The problem was reported by Joe Lisa, assistant guardian for
information for Flag, in his daily report of Aug. 5:

"Situation: The missing guns belonging to the Boss have shown up in the
custody of the Bureau of Alcohol, Tobacco, and Firearms (ATF), and ATF
knows that some of these guns belong to the boss.

"Why: The investigation to find the guns omitted a thorough search of
King Arthur's Court ...

"Handled: Got the story of what occurred from two ATF agents from the
Tampa ATF office: Several days ago the guns were discovered in Apt. No. 1
at King Arthur's Court by cleaners; the cleaners informed the owners of
KAC, a local bank; the bank reported the guns to the Dunedin Police
Department, who in turn reported it to ATF Tampa. Due to an inventory list
packed with the guns, and an engraving on one of the guns, they know the
Boss owns some of the guns.

"Legal got a description of the guns from ATF as well as what is needed
by ATF in order to claim the guns. A fast handling will be done."

But it wasn't fast. One of the guns was a German-manufactured Mauser
machine pistol. The law requires registration of this type of weapon. The
church attorneys argued however, that it was an antique rather than a
serviceable weapon. Not until late in the year did ATF drop its
investigation, and even then the case wasn't closed.

In April 1977, a report on a Guardian investigation to find out why it
was continuing said: "On the local level the State US Atty., James Russell,
has been investigating the base (church headquarters in Clearwater) since
it started, and has connections to almost all the major SPs (suppressive
persons) in the area. It was found that Russell had been in on the
investigation re the guns scene from the beginning. He started taking an
active role at the point the BAT&F investigation failed. This looks like
BAT&F were ready to drop the cycle, but Russell with his vested interest
stepped in and kept the area hot. Documentation of this is needed, as our
data does not contain this ...

"It looks like Russell is going for a big win like he had on the Dare-
To-Be-Great group prosecution he did a few years back, and considers
Scientology just such a group; so I don't think he will fade into the
woodwork without some planning on our part."

Documents do not indicate whether the Guardians ever took any action
against Russell.

But, in another case, the Guardians managed to take a microphone away
>from Bob Snyder, a talk show host for radio station WDCL, with their
standard strategy for handling media people who make their enemies' list.
But he kept on talking.

In early February 1976, Snyder was fired by WDCL. He said the station
was threatened with a $5-million suit if it did not stop him from
criticizing the church.

WDCL's general manager, Ross Charles, said the station attorney advised
that Snyder be fired because of litigation expenses that "a little station
in Dunedin" could not survive.

Snyder was rehired a month later with the understanding that he would
not discuss Scientology on his program.

However, he began writing a newsletter and organized several public
forums in which he criticized the church. In June, Fred Ulan, an assistant
public relations official for the church, reported to public relations
director Artie Maren that not enough was being done to silence Snyder. To
make up for this shortcoming, he said, FREEDOM, a Scientology publication,
was preparing an article "tying Snyder in with Interpol as he has stated he
supports them, and using the one-world rule button which Snyder hits us
with saying Snyder now supports Interpol which supports one world rule by
its very nature."

Joe Lisa reported to Duke Snider in a March 31 daily report that Snyder
had been in communication "with Paulette Cooper and that Cooper plans to be
in this area in two weeks for the next Snyder event."

It so happened that the very next day the Guardians drew up a new
operation to handle their old nemesis Paulette Cooper, author of The
Scandal of Scientology, a book highly critical of the religion. They called
it "Freakout."

Its goal was "to get P.C. incarcerated in a mental institution or jail,
or at least hit her so hard that she drops her attacks."

Recently, the U.S. attorney's office for the District of Columbia
described this plan in the "Sentencing Memorandum" drawn up following
conviction of nine Scientologists in a case involving the theft of
government documents and efforts to cover it up. The government said six of
the defendants were involved in the scheme against Miss Cooper: Henning
Heldt, Duke Snider, Dick Weigand, Greg Willardson, Mitchell Hermann and
Cindy Raymond.

The memorandum said: "In its initial form Operation Freakout had three
different plans. The first required a woman to imitate Paulette Cooper's
voice and make telephone threats to Arab Consulates in New York. The second
scheme involved mailing a threatening letter to an Arab Consulate in such
a fashion that it would appear to have been done by Paulette Cooper.
Finally, a Scientology field staff member was to impersonate Paulette
Cooper at a laundry and threaten the President and then Secretary of State
Henry Kissinger. A second Scientologist would thereafter advise the FBI of
the threat ...

"Two additional plans to Operation Freakout were added on April 13,
1976 ... The fourth plan called for Scientology field staff members who had
ingratiated themselves with Cooper to gather information from Cooper so
Scientology could assess the success of the first three plans. The fifth
plan was for a Scientologist to warn an Arab Consulate by telephone that
Paulette Cooper had been talking about bombing them.

"The sixth and final part of Operation Freakout ... (was) to obtain
Paulette Cooper's fingerprints on a blank piece of paper, type a
threatening letter to Kissinger on that paper, and mail it."

Once before the Guardians had gotten Ms. Cooper indicted -- the charge
was later dropped -- with a fabricated threat to bomb a Church of
Scientology office. But this time the plan was not carried out.

Time ran out for the Guardians.

12. Scientologists' downfall began with phony IDs

The scope of it was astonishing.

For at least two years, Guardians of the Church of Scientology operated
an espionage system that spanned America.

They were heavily involved on the Florida Suncoast in 1976 and early
'77: Defaming the mayor of Clearwater, seeking to gag The St. Petersburg
Times, the Clearwater Sun, and a stubborn radio talk show host,
infiltrating an attorney's office and stealing files, framing schemes to
embarrass St. Petersburg police.

But that was just one scene in a panorama.

Church documents released by a federal court in Washington show that
the Guardian network linked Clearwater with Washington, New York, Los
Angeles, and it was as busy as a beehive in honeysuckle season.

But the end was coming ...

There was no hint of it on Feb. 17, 1976, a routine day for the
Guardians. That day they passed the word to the church's legal department
to prepare a formal letter to the Clearwater Sun demanding a retraction and
threatening a libel suit. That day, too, the deputy guardian for
information U.S., Dick Weigand, sent a letter to the deputy guardian U.S.,
Henning Heldt, "Re: Yorty and Wayne."

It began:

"Dear Henning,

"I believe that you had asked that a check be done for Sam Yorty and
John Wayne in the 1361 agency's (Internal Revenue Service) files.

"Sam Yorty's file is attached ..."

However, Weigand said, the church's agent hadn't been able to locate
the file for actor John Wayne. He said he would keep trying.

The letter was signed "Love, Dick."

Guardians always signed their letters "love."

The letter from Weigand to Heldt was giving the latest developments on
Guardian Order 1361-3, which Weigand drafted and Heldt approved on Jan. 4,
1976. It directed a church agent to steal Los Angeles Internal Revenue
Service (IRS) intelligence files on "celebrities, politicians and big
names" so they could be leaked to the press.

Heldt didn't want them around his office, however. He returned them to
Weigand, telling him "I don't need such hot stuff in my files."

The documents do not reveal why the Scientologists wanted the IRS
documents dealing with the "celebrities, politicians and big names." There
also was no indication that the church had anything personal against these
people.

In Washington's Rock Creek Park the night of March 14, Mike Meisner was
the "victim" in a fake hit-and-run accident staged in an attempt to ruin
Clearwater Mayor Gabriel Cazares. A night or two later, Meisner and Gerald
Bennett Wolfe -- the agent "Silver" -- entered the IRS building at 1111
Constitution Ave. NW, flashing Wolfe's IRS identification card at the
security guard.

Using a small piece of sheet metal, Wolfe forced the latch on the IRS
identification room. Inside, Meisner found a booklet giving instructions on
the use of the photographing machine. Wolfe took blank identification cards
and typed in fictitious names -- two for himself and two for Meisner. They
took the necessary photographs and made fake IRS ID cards.

In early April, the Clearwater edition of the church publication
FREEDOM accused St. Petersburg Times owner Nelson Poynter of being an agent
of the CIA. About that same time, the highest officials of the Guardian
Office ordered the implementation of "Operation Devil's Wop." It was
directed at Arizona Sen. Dennis DeConcini, who had supported various anti-
cult groups. The goal of the operation was to leak to the press a false
report linking the senator with organized crime.

And in Washington one evening in mid-April, Wolfe and Meisner showed
their false ID cards as they entered the building housing offices of the
International Operations Office of IRS. They went to the office of Thomas
Crate, an auditor who had tax records of L. Ron and Mary Sue Hubbard,
Scientology's founder and his wife. The door was locked. A cleaning woman
thought they looked suspicious. She called a security guard.

Meisner and Wolfe showed the guard their fake ID cards, and he was
satisfied. The cleaning woman then unlocked the office door for them. They
found several thick files on the Hubbards and Scientology, but they
couldn't find a photocopying machine.

No sweat.

They took the files to the main IRS building where they copied them,
and then returned the originals to Crate's office.

Twice more before the end of May, Meisner and Wolfe returned to Crate's
office, and both times the obliging cleaning woman let them in.

April 26, 1976: Sharon Thomas -- the driver of the car in the fake hit-
and-run accident set up to discredit Cazares -- entered the office of
Justice Department Attorney Paul Figley, who was supervising all Freedom of
Information (FOI) cases. She copied all documents relating to a pending FOI
lawsuit brought by Scientology against the Energy Research and Development
Administration and gave the copies to Meisner. Two months later she managed
to get assigned as Figley's secretary.

The Guardian's Office ground out one operation after another. In
Washington, Wolfe and Miss Thomas carted off stacks of copies of IRS and
Justice Department documents that they passed to Meisner who forwarded them
to Guardian executives.

Feb. 3, 1977: Heldt wrote Weigand that the Guardians, in order to
"ensure a win on the New York case against Hare Krishna leaders for Mind
Control," must have the minutes of the grand jury because they were "vital
to Legal's handling in the case and PR's actions." He told Weigand to
obtain them "through legal or other means." A reply came the next day that
legal means were out, "however, we have had some success (limited) in the
past in getting this type of data thru the steno service which transcribes
the testimony."

March 25, 1977: An order went out to all Guardians introducing the "red
box system." All red box material was to be centrally located in a moveable
container, ideally a briefcase, locked and marked and persons deputized to
remove it from the premises in case of a raid. "This procedure will be
drilled," the directive said. Red box material was defined as:

"(a) Proof that a Scnist is involved in criminal activities.

"(b) Anything that implicates MSH, LRH (the Hubbards).

"(c) Large amounts of non FOI docs.

"(d) Operations against any government group or persons.

"(e) All operations that contain illegal activities.

"(f) Evidence of incriminating activities.

"(g) Names and details of confidential financial accts."

June 24, 1977: A Guardian passed the word to other Guardian officials
that he had recruited and placed an FSM -- covert agent -- as a reporter-
researcher for Forbes magazine. "My FSM's name will appear on the masthead,
starting with the issue of 15 July 1977," he said.

The end actually began -- if an end has a beginning -- on the evening
of June 11, 1976.

The story is told in the uncontested evidence offered by the government
at the Washington trial of nine Scientologists on conspiracy charges.

Meisner and Wolfe were sitting in the library of the U.S. Courthouse on
John Marshall Place -- at the foot of Capitol Hill where Constitution
Avenue intersects with Pennsylvania. They were waiting for a cleaning crew
to get out of the office of Nathan Dodell -- an old foe of Scientology --
so they could steal Dodell's personal files in order to devise a covert
operation to remove him as an assistant U.S. attorney for the District of
Columbia.

Two FBI agents, summoned by a suspicious night librarian, approached
them and asked for identification. Meisner showed his IRS identification
card. While agent Dan Hodges went to a telephone to call an assistant U.S.
attorney, agent Christine Hansen questioned the two men. Meisner said he
and Wolfe had been in the courthouse to do legal research and that they had
used the photocopying machine in the U.S. attorney's office to copy legal
books and cases.

After 15 minutes, Meisner inquired if they were under arrest. When
agent Hansen said they were not, Meisner said they were leaving and he and
Wolfe walked out.

The next day, Meisner flew to Los Angeles where he gave a full report
of the incident to Guardian officials. "All parties recognized," in the
words of U.S. attorneys who later described the moment in a Stipulation of
Evidence, "that the highest priority lay in stopping the FBI investigation
before it could connect the defendant Wolfe and Mr. Meisner to the Church
of Scientology and thereby expose other officials of the Guardian's Office
who had been involved in the burglaries, thefts, and buggings ..."

A cover story was devised and Wolfe was briefed. He was arrested in
Washington on June 30 and charged with use and possession of a forged
official pass of the United States. He later pleaded guilty.

He was called before a grand jury on July 28, where he stuck to his
cover story, a story that did not mention Scientology. A few days later a
warrant was issued for Meisner.

For the next 11 months, church officials harbored a fugitive. Meisner
was moved from one location to another in the Los Angeles area. His
appearance was changed. He grew restive and upset with his superiors. When
he threatened to return to Washington, they held him prisoner.

On June 20, 1977, while his guards were away, Meisner left his
apartment in Glendale, Calif., called the FBI, and surrendered to agents at
a bowling alley. At 6 a.m., July 8, 134 FBI agents armed with search
warrants and sledgehammers broke into church offices in Los Angeles,
Hollywood and Washington. They carted off 48,149 documents -- thousands of
them "red box material."

On Aug. 15, 1978, a grand jury in Washington indicted 11 Guardians --
>from Mary Sue Hubbard at the top to Sharon Thomas at the lowest, agent
level. They were accused of 28 counts of conspiracy, theft and burglary.
Eventually, nine of them -- two are still fugitives -- were found guilty of
one count each.

With their convictions, much of the documentary evidence seized in the
1977 FBI raid was made public.

That was the end.

13. Book spells out rationale for church's 'spy system'

The book, researched, edited and published by the U.S. Ministerial
Conference of Scientology Ministers, is entitled: The American Inquisition
-- U.S. Government Agency Harassment, Religious Persecution and Abuse of
Power.

And this is the introduction:

"Since the inception of the Scientology religious movement more than a
quarter of a century ago, government agencies together with vested interest
pressure groups have attempted through both overt and covert means to
suppress the Church's spiritual practice and expansion.

"The Church's extensive efforts in the areas of governmental and social
reform have met with government retaliation and attempts to cover up
political corruption and dirty tricks. In 1940, the government was excited
by the possibility of monopolizing L. Ron Hubbard's work and sought to
force him into classified government service to work on projects which
would pervert the positive goals and purposes of his work. When Mr. Hubbard
declined, the government threatened him -- and the war between Scientology
and the government was on. Since that time, various factions within the
government have attempted to commit genocide and eliminate the religious
technology over which they sought to gain a monopoly.

"During these past three decades, government agencies have spied,
harassed, taped phones, falsely arrested, intercepted mail, denied
religious and civil rights and conducted themselves with utter disregard of
the Constitution. As history tells us, new religions have always engendered
opposition from government and vested interests. From the origins of
Christianity to Mormonism and Christian Science, freedom of worship has
been a right hard won by diligence and faith. In this tradition,
Scientology has continued to win all major battles against the repression
and harassment of U.S. government agencies."

The book was published by the Church of Scientology before nine of its
members, including some of its highest ranking officials, were convicted
and sentenced for actions that included the bugging of government offices
and the theft of government documents.

But the introduction is a concise summary of Scientology's
rationalization for the formation of the Guardian Office, which the nine
members served and which operated a widespread, intercontinental espionage
system.

It might be summarized even more concisely: an eye for an eye.

The day the nine Scientologists were found guilty, Rev. Kenneth
Whitman, president of the Church of Scientology of California -- the
central church -- issued this statement:

"There are four key issues which I wish to address:

"1. It has always been official Church policy to uphold the laws of the
land. The Church did not and does not condone violations of this policy.

"2. Neither does the Church condone the flagrant lawlessness of corrupt
government officials whose unprosecuted crimes range from chemical murder
in the form of CIA and Army human experiments to the millions of tax
dollars wasted by federal agents who launch disruption campaigns against
ordinary citizens, religious leaders like Martin Luther King, writers and
movie stars like Jean Seberg who express views which some J. Edgar Hoover
type dislikes.

"3. For three decades, the Church has worked to obtain honesty in
government by exposing such crimes as a planned assassination of a foreign
leader by the Drug Enforcement Administration, IRS dirty tricks against
taxpayers and the CIA's bizarre mind control programs. Our successful
reward campaign for government whistle-blowers, our stand against
discrimination and our international efforts to close the doors on
deplorable biological and chemical experiments have gained us a reputation
as leaders in social reform. We are continuing vigorously to fight on
behalf of the constitutional rights of all Americans.

"4. The Church cannot speak for the defendants. We assume that they
will comment at the appropriate time on advice of their attorneys. This
case involves nine individuals who have all been part of the arm of the
Church dealing with government affairs. It is one of the 21 departments
within the overall structure of the Church of Scientology. The main body of
church activity deals with ministerial training and counselling. While we
strengthen our social activism, the bulk of our efforts continue to go
toward meeting the needs of our rapidly-increasing numbers of new
parishioners and ministers. In the last two years, we have experienced the
most intensive growth in our three-decade history and today our worldwide
membership is estimated at five million with 298 churches and missions on
five continents."

When documents which formed the foundation for indictments of
Scientologists, documents which were seized in FBI raids on church offices,
were made public, Rev. Whitman again stressed that the espionage was
isolated from most of the church.

"The release of further documents from the defendants or members of the
Information Bureau of the Guardian Office will tell nothing about the
actual workings of the Church of Scientology or of the crimes of government
agencies which the Church has been fighting for over 25 years," he said.

Denis McKenna, a public relations spokesman, told a Times reporter that
while the church does not condone law breaking, it should be understood
that the nine defendants were frustrated because of the long-standing
vendetta against the church by the government.

McKenna offered another Scientology booklet, The Dossier Disease, to
explain this frustration.

The booklet states that during the 1960s, the church "initiated a
program to trace the difficulties it had had with various agencies not only
in the United States but in other countries as well." It used the Freedom
of Information Act, enacted in 1967, to obtain copies of thousands of pages
of documents about Scientology from government agencies.

"To locate and handle the source of false reports on the Church of
Scientology that had spread in the preceding two decades, the Guardian's
Office initiated a False Report Correction program," the booklet said.

The goal of the program, it said, was to locate false reports about
Scientology in government files and get them corrected.

Rev. Hugh Wilhere, another church spokesman, said that in the course of
carrying out this program, the Guardian's Office found that false reports
about Scientology were being spread by intelligence agencies, particularly
Interpol.

As a result, he said, it undertook a massive investigation of Interpol
which revealed that the international crime exchange agency "had lied to
Congress about its Nazi past and, in fact, up until 1972, Interpol's
president was a former Nazi SS official (Paul Dickopf, SS 337259); Interpol
is a private organization under no government control yet has access to
U.S. law enforcement files; that Interpol exchanges information with
Communist countries thus jeopardizing the security of U.S. law enforcement
information."

Wilhere also said that much of the information obtained by illegal
means clearly showed wrongdoing by government officials and harassment of
Scientology and other groups and individuals. He cited a half-dozen cases.

That is substantially the church's explanation for the actions of the
Guardian's Office that led to the convictions of nine Scientologists.

There are problems with it. To cite a few:

-- The explanation changed substantially as more and more was revealed.
In May 1978, church spokesman Arthur J. Maren said the church had been
engaged in "reform action ... a legitimate and traditional function of the
church." Published reports that seized documents would show that, for
example, a fake hit-and-run accident was staged in Washington in an effort
to compromise the mayor of Clearwater, were denied. Maren also denied that
the church regards anyone as enemies. "As a church which believes that man
is basically good and devotes itself to helping others, we have no
enemies," he said. Church documents released as a result of the court case
have shown otherwise.

-- The explanation is that the illegal actions were carried out by a
small group of individuals in one isolated division of the church. However,
the illegality goes right to the top of the church organization. One of
those indicted and convicted was Mary Sue Hubbard, wife of founder L. Ron
Hubbard. The church documents show a close working relationship between the
Guardian's Office and the church's legal department. And most damning of
all is the fact that the Guardian's Office operated on the basis of
precepts and policies written by founder Hubbard and set forth in church
publications. Hubbard, in fact, was listed by the grand jury as an
unindicted co-conspirator.

-- The church's interpretation of the meaning of some government
documents illegally obtained by the Guardians is also open to question.
Consider the Defeo Report, "in which," according to the church, "members of
the Drug Enforcement Administration plotted the assassination of foreign
leaders in Panama." Actually the report was issued on an investigation of
allegations of fraud and misconduct in the Drug Enforcement Administration
(DEA). The document alleged by the church to be the Defeo Report does not
state that an assassination plot was made, but only that "it was alleged
that a discussion concerning assassination" of a Panamanian official took
place and that DEA officials were involved in the discussion.

In the end, the problem with the church's explanation is L. Ron
Hubbard's definition of truth: "Truth is what is true for you."

The church considers them modern martyrs, political prisoners of a
vengeful government. The government of the United States considers them
criminals.

The nine Scientologists have been sentenced to jail.

In the government's sentencing memorandum to U.S. District Judge
Charles R. Richey, the prosecution summed up the government's views:

"The United States initiated the investigation which resulted in the
instant indictment in view of the brazen, systematic and persistent
burglaries of the United States Government offices in Washington, D.C. and
Los Angeles, Calif. over an extended period of at least some two years.
Additionally, the United States was confronted with the pervasive conduct
of the defendants in this case in thwarting a federal grand jury
investigation by harboring a fugitive, in effect forcefully kidnapping a
witness who had decided to surrender to the federal authorities, submitting
false evidence to the grand jury, destroying other evidence which might
have been of valuable aid to its investigation, preparing a coverup story,
and encouraging and drilling a crucial witness to give false testimony
under oath to that grand jury.

"Such outrageous conduct, it was felt, struck at the very heart of our
judicial system -- a system which has often been, at crucial times in our
history, the saviour of our institutions. We consider that in view of the
widespread and long drawn out nature of these offenses, as well as their
heinousness, we would have been derelict in our duty to enforce the laws if
we had failed to bring the charges in the instant indictment.

"Moreover a review of the documents seized in the two Los Angeles,
Calif. searches, which have been unsealed by this court, show the
incredible and sweeping nature of the criminal conduct of the defendants
and of the organization which they led. These crimes include the
infiltration and theft of documents from a number of prominent private
national and world organizations, law firms and newspapers; the execution
of smear campaigns and baseless law suits to destroy private individuals
who had attempted to exercise their First Amendment rights to freedom of
expression; the framing of private citizens who had been critical of
Scientology, including the forging of documents which led to the indictment
of at least one innocent person; violation of civil rights of prominent
private figures and public officials ...

"It is the position of the United States that each and every one of the
defendants herein fulfilled his duties as expected by the Church of
Scientology, that all of their criminal activities, as well as those of all
unindicted co-conspirators, were carried out in furtherance of the very
goals of their church. The very policies of the church, as reflected by its
Guardian Orders, called for the execution of massive criminal conspiracies
and rewarded the participants for their success in carrying out these
criminal policies."

Scientology is in trouble.

Judge Richey, obviously agreeing with the prosecutors, imposed heavy
sentences: From six months in jail, five years probation, and a $1,000 fine
for Sharon Thomas, up to a maximum five years in jail and a $10,000 fine
for Raymond and Wolfe.

He also imposed the maximum sentence on Mary Sue Hubbard, wife of
church founder L. Ron Hubbard and the second most powerful figure in
Scientology. But he agreed to reconsider the sentence after she has spent
three months in prison.

Judge Richey said initially that the nine must go to jail immediately.
But after the U.S. Court of Appeals for the District of Columbia granted
the release of three of the defendants pending the outcome of their
appeals, Judge Richey relented. He released them all pending appeal,
provided they had paid their fines. The appeals, based on a claim that the
FBI raids on church offices were illegal, will take time and could end up
before the Supreme Court. But activity at the trial court level isn't
necessarily over.

There could be more to come. Two persons named in the 28-count
indictment, Jane Kember and Morris "Mo" Budlong, are in England. The
British courts have ordered them returned to the United States to face
trial, but they have appealed to the House of Lords.

Founder L. Ron Hubbard was not indicted by the grand jury which charged
his wife and the other 10 Scientologists, but he was named a co-
conspirator. The grand jury listed 22 other unindicted co-conspirators.

The Guardian Office has been decimated. Mary Sue Hubbard held the
highest position as commodore staff guardian. Kember, Budlong, Heldt,
Snider, Willardson, Weigand and Raymond were senior Guardians, and Hermann
a senior official until he was fired in the summer of '77. Wolfe and Thomas
were two of the Guardian Office's most effective FSM's -- covert agents who
infiltrated government agencies.

As a result of the documents released in connection with the Washington
trial, federal grand juries in Tampa and New York are investigating
Scientology.

The evidence has also been made available to state law enforcement
authorities in several locations, including Pinellas County.

But most injurious to a church that shuns publicity -- a church that
prefers to achieve growth through word of mouth rather than the printed
word -- has been the story woven in the public press of the espionage
system operated by the Guardians and its misdeeds.

At the request of Rep. C.W. Bill Young, St. Petersburg Republican, the
House Select Committee on Intelligence will hold a hearing -- a closed
hearing -- on the infiltration of government agencies by agents of
Scientology. The date has not been set.

In Boston, Lavenda Van Schaick, 29, has filed a $200-million lawsuit
against the church, accusing it of cheating thousands of converts by
subjecting them to "mind control." She contends that the church misled her
into divorcing her husband, paying about $13,000 for auditing, and working
for the church without pay for nine years in Las Vegas and Clearwater.

In Oregon, a former Scientologist recently was awarded $2-million in
damages against the church. In Riverside, Calif. an indictment has linked
church members to an alleged bank fraud scheme.

Scientology is down. But it would be a mistake to count it out.

It remains wealthy and feisty.

Since moving into Clearwater late in 1975, when it purchased the Fort
Harrison Hotel, and the old Bank of Clearwater building for approximately
$3-million in cash, the church has steadily increased its property holdings
in Pinellas County.

It paid $2.5-million for the 100-room Sandcastle Inn, on Clearwater's
downtown bayfront. It purchased the West Coast Building and the building
occupied by Clearwater Plasma Products, both in downtown Clearwater. It
purchased the Quality Inn on U.S. 19 for $1.8-million.

The church has agreed to buy the Heart of Clearwater Motel, which it
has been operating through a lease purchased from two couples, for $950,000
by next March 1.

A long legal fight over the church's Pinellas County property tax bill
for 1976 and 1977 came to an end Dec. 14 when the church paid $126,753 in
back taxes. But Scientology President Kenneth Whitman said the church will
continue its court fight for exemption from its 1978 and 1979 tax bills.
They total $151,157.

The church remains vocal. It has accused Clearwater City Commissioner
Richard Tenney of violating its civil rights by his criticism of the
actions of the Guardian Office and by his organizing of public
demonstrations against the church.

On the national scene, Church of Scientology officials called a news
conference in Washington Dec. 3 to report that their four-month analysis of
CIA records suggests that the federal intelligence agency conducted
biological warfare tests in New York City streets and tunnels in 1955 and
1956.

Thirteen days later, they held another news conference to state that,
according to their analysis, the CIA might have conducted open-air tests of
whooping cough bacteria in the Tampa Bay area in 1955. CIA financial
records that have been made public over the last 30 months indicate such a
test might have taken place, said officials of American Citizens for
Honesty in Government, a Scientology organization. In addition, they said,
state medical records show an outbreak of whooping cough about that time
that killed 12 persons.

Clearly Scientology still carries a chip on its shoulder.

One wonders whether the actions of the Guardians that got them
sentenced to jail could ever be repeated.

Just before Mary Sue Hubbard was sentenced, she told Judge Richey, "I
publicly want to say I accept full responsibility for the charge of which
I have been convicted. I sincerely regret my wrongdoing. I have done
everything within my power to see that nothing like this ever occurs in the
future."

What has she done? What has the church done to see that "nothing like
this ever occurs in the future."

On Dec. 20, President Whitman met for an hour with Eugene Patterson,
editor and president of The St. Petersburg Times, and three other Times
employees.

"On behalf of the Church of Scientology and its members," Rev. Whitman
said, "I want to offer a sincere apology for the conduct of some within the
church toward yourself and some of your reporters."

He said that he was holding a series of meetings with political,
business, religious and news people in Pinellas County in an effort to calm
the confrontation atmosphere that had developed between the church and the
community.

He said that founder Hubbard was not involved in day-to-day activities
of the church, and that the criminal activities were carried out by a few
isolated individuals who violated church policies and misinterpreted
Hubbard policies.

He said there was "no justification for what occurred," and that "the
burden of proof is on us."

Some days later, following a meeting with the board of directors of the
"Mother Church" in Los Angeles, Rev. Whitman told The Times that specific
actions have been taken to prohibit illegal or harassive actions by church
members.

A new Guardian Order entitled "Scientology and the Law" has been
circulated to all Guardian offices and staff members, he said. Whitman said
the order draws heavily on a 1961 Hubbard policy statement entitled "Clean
Hands Make a Happy Life."

The new order begins: "In the past some individuals have apparently
sought to assist the Church of Scientology by committing harassive or
illegal acts. Such actions are NOT help and in fact make our work more
difficult in that such acts misrepresent basic tenets of the church."

The order states: "If it is felt that the laws of the land are not
just, then the proper remedies are to be sought through the appropriate
legislative body or through the courts ... Orders calling for harassive or
illegal acts are clearly destructive as are representations that such acts
would further the aims of the church."

It contains penalties: "Henceforth anyone proposing or carrying out a
harassive or illegal act in the name of, or for the purpose of 'assisting'
the Church of Scientology will be immediately subject to a committee of
evidence which will consider the facts of the case and recommend upon
penalties not excluding expulsion."

Whitman said the order makes it the duty of any Scientologist who
learns of an illegal action by another church member to make the
information available to the nearest church ethics office.

"Scientologists," the order states, "obey the law and violations of the
law are expected to be dealt with according to the existing law enforcement
and judicial system within our society."

Whitman said the church has also organized a Controller's Committee to
oversee activities of the Guardian Office.

Was Mrs. Hubbard involved?

"I believe so," Whitman said. "I don't know the intricacies of the
formation of the committee, but it actually was formed under her. I am sure
it was her intention that the committee exist."

The committee is headed by Rev. Fred Hare of Los Angeles.

There has been no cancellation of existing church policies or Hubbard
policy statements, Whitman said, because none is necessary.

"Whether or not anybody issued any kind of Guardian Order in the past,"
he said, "this Guardian Order is quite specific and there are no exceptions
to this policy. This is the church policy and this is what happens if
someone carries out an illegal or harassive activity in the name of the
church."

Meanwhile, the nine defendants in the Washington case remain members of
the church, Whitman said, although some have been removed from their staff
positions.

"All have performed individual acts of contrition," he said.

He declined to describe these acts because they "might appear odd to
someone else." He said they involved "a great deal of spiritual self-
examination" and making "amends in terms of working and contributing to
some positive situation regarding the church."

The church has not paid their legal bills, Whitman said. Instead a
defense committee has been formed to raise funds for them.

"I don't think any of these individuals could afford to pay them,"
Whitman said. "I understand they have, or will, run over a million
dollars."

Whitman said he is trying to arrest the notion that the illegal actions
of a few church members represent "the policy of the church and of millions
of Scientologists."

"It's totally bizarre and completely out of keeping with what we
believe," he said, "yet it is being interpreted as what we believe."

Whitman said Scientology seeks a "civilization without criminality" and
has worked toward this goal through programs to reduce crime and drug abuse
and to re-educate former criminal offenders.

Whitman said he also hopes to achieve "the right of Scientologists to
practice their faith in Clearwater."

The new Guardian Order was offered as reassurance to the community that
past criminal acts will not occur again. "I think the Guardian Order makes
clear what will be done if there are any illegal acts," Whitman said.

He said there was no "direct consultation" with founder Hubbard in
drawing up the order. But Hubbard, he said, "does continue to write
doctrine and policy letters."

That is the same founder Hubbard, Commodore Hubbard, who counselled his
followers in the past that "truth is what is true for you."